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Total and Tellurian finalise Driftwood agreements

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Tanks and Terminals,


Tellurian has announced that it has entered into definitive agreements with Total Delaware and Total Gas & Power North America, subsidiaries of Total S.A., for Total Gas & Power to purchase one million tpy of LNG from the Driftwood LNG terminal and for Total to invest US$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 million tpy 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 definitive agreements are consistent with the terms contemplated by the heads of agreement announced on 3 April 2019, and 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 US$13.8 billion. The Tellurian team thanks Total for their leadership and we look forward to beginning the largest privately funded US 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 ft3/d of natural gas, providing solutions for the acute US 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 US$200 million, subject to certain closing conditions, including the FID to construct Driftwood. Total’s aggregate investment in the Tellurian portfolio will be approximately US$907 million at FID.

The Driftwood LNG terminal is a proposed ~27.6 million tpy liquefaction export facility that will be located near Lake Charles, Louisiana on the US Gulf Coast. The terminal and associated pipeline have received all the necessary permits and licences to begin construction.

Read the article online at: https://www.tanksterminals.com/terminals/11072019/total-and-tellurian-finalise-driftwood-agreements/

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