July 22, 2019 [Tank News International] – Tellurian has entered into definitive agreements with Total Delaware and Total Gas & Power North America, Inc, subsidiaries of Total, for Total Gas & Power to purchase 1 mtpa of LNG from the Driftwood LNG terminal (Driftwood) and for Total to invest $500 million in Driftwood Holdings LP.
In addition, Tellurian and Total Gas & Power entered into a definitive sales and purchase agreement for an additional 1.5 mtpa of LNG from Tellurian’s LNG offtake volumes from Driftwood. The SPA is for the purchase of LNG free on board at a price based on the Platts Japan Korea Marker.
The agreements are subject to certain closing conditions, including the final investment decision (FID) to construct Driftwood.
President and CEO Meg Gentle said: “The agreements we have executed with Total confirm the business model for the Driftwood project, establishing it as an LNG joint venture partnership with an implied value of $13.8 billion. The Tellurian team thanks Total for their leadership and we look forward to beginning the largest privately funded U.S. infrastructure project. We intend to finalise the agreements with the remaining partners and make FID in 2019. At full capacity, Driftwood will be capable of exporting approximately 4 billion cubic feet per day of natural gas, providing solutions for the acute U.S. oversupply and delivering cleaner air to the world.”
As previously announced, in April 2019, Tellurian and Total executed a common stock purchase agreement pursuant to which Total will purchase shares of Tellurian common stock for approximately $200 million, subject to certain closing conditions, including the FID to construct Driftwood. Total’s aggregate investment in the Tellurian portfolio will be approximately $907 million at FID.
The Driftwood LNG terminal is a proposed 27.6 mtpa liquefaction export facility that will be located near Lake Charles, Louisiana on the U.S. Gulf Coast. The terminal and associated pipeline have received all the necessary permits and licenses to begin construction.