• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 6 days Does Toyota Know Something That We Don’t?
  • 8 hours America should go after China but it should be done in a wise way.
  • 6 days World could get rid of Putin and Russia but nobody is bold enough
  • 8 days China is using Chinese Names of Cities on their Border with Russia.
  • 9 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 9 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 9 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 8 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 9 days Putin and Xi Bet on the Global South
  • 9 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 10 days United States LNG Exports Reach Third Place
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Tellurian Fights to Keep Driftwood LNG Project Alive

Tellurian is fighting for survival and keeping its Driftwood LNG export project alive, sources with knowledge of Tellurian’s current thinking have told Reuters, after the company failed to secure commercial offtake deals to underpin its final investment decision for the project.

Tellurian has been planning for years to build Driftwood LNG, a production and export terminal on the Calcasieu River south of Lake Charles, Louisiana. Once complete, the terminal would be capable of exporting up to 27.6 million tons of liquefied natural gas annually.   

But failing to secure agreements and funding for the plant, Tellurian said in November that liquidity issues "raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued."

In early December came the departure of co-founder Charif Souki, who was terminated "without cause" from his position as executive chairman. 

At Driftwood LNG, Souki had a different vision of how the project would monetize exports. Unlike other LNG export projects, which are underpinned by long-term offtake agreements with customers that lead to final investment decisions, Driftwood LNG would own gas wells in Louisiana, transport the gas, liquefy the gas, and sell it under agreements pegged to international indexes—making those sales vulnerable to downcycles or muted international natural gas prices. 

This business model failed to attract enough customers. In fact, Shell, Vitol, and Gunvor have all withdrawn as potential customers of LNG from the Driftwood project over the past year and a half. 

Earlier this week, Tellurian said it had asked its financial advisor, Lazard, to explore opportunities for the sale of Tellurian’s upstream business in the Haynesville shale.

“By unlocking the full value of these high-quality assets, we aim to substantially reduce our debt, further reduce our general and administrative expenses, and provide additional cash, enabling us to develop Driftwood LNG,” CEO Octávio Simões said on Tuesday.

“Currently, this approach is more attractive than issuing equity to fund our 2024 development activities and working capital needs.”

According to one of Reuters’ sources, Tellurian’s top priority now is to boost liquidity and reset commercial relationships and contracts to potentially get better deals for Driftwood LNG.   

ADVERTISEMENT

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News