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US LNG firm Tellurian said on Monday it expects to take a final investment decision in 2024 to build the first two plants at its Driftwood LNG export plant in Louisiana.
“Plants 1 and 2 are expected to FID in 2024 with plant 3 expected six to nine months thereafter,” the company said in a new presentation posted on its website.
Tellurian expects to own 35-40 percent of the first two plants and an “increasing share” of expansion plants.
It expects to have a 50 percent ownership in the third plant, 60 percent ownership in the fourth, and 65 percent ownership in the fifth plant.
The company also said it expects to issue a full notice to proceed to compatriot engineering and construction giant Bechtel to begin construction for for the first phase of the plant in the second half of this year.
Under the first phase, Tellurian aims to build two LNG plants near Lake Charles with an export capacity of up to 11 mtpa.
Tellurian issued a limited notice to proceed to Bechtel in March 2022 and it said in August last year that Bechtel completed piling work for the first plant and also concrete pouring for all plant one compressor foundations.
The firm claims it invested more than $1 billion in Driftwood with construction of the first two plants about 30 percent advanced.
The full project would include five plants with a total capacity of about 27.6 mtpa.
Tellurian also said in the presentation that potential expansion options could include a second facility with up to 30 mtpa of capacity.
Tellurian recently secured more time from the US FERC to complete the construction of its Driftwood LNG project.
The firm isalso exploring the sale of its Haynesville upstream assets as it works on securing financing for the first phase of its Driftwood LNG project worth about $14.5 billion.
Tellurian’s co-founder Martin Houston and chairman of the board said in a letter to shareholders on Monday that the “recent announcements from the DOE, along with additional focus and simplification, have helped our commercial efforts.”
“We’ve widened the commercial aperture, whilst maintaining our business model. We have materially reduced corporate overhead and strengthened our balance sheet,” he said.
Besides this, Tellurian has agreed to “amend delivery dates for long-lead equipment and to extend Driftwood LNG construction work,” Houston said.
Tellurian signed an equipment deal with Baker Hughes last year.
Houston also said that on February 27, Tellurian’s board appointed him as the company’s executive chairman.
“This is part of a leadership succession and renewal process which will be implemented in the coming months,” he said.
In December, Tellurian appointed Houston as the chairman replacing Charif Souki, who has left the Driftwood LNG terminal developer.
Besides Houston’s appointment, Tellurian’s board elected on March 1 not to renew or extend the term of the company’s employment agreement with CEO Octavio Simoes, beyond the term ending on June 5, 2024.
The Biden administration said in January it will “temporary pause” pending decisions for LNG export terminals.
The US paused pending decisions on exports of LNG to non-FTA countries until the Department of Energy can update the underlying analyses for authorizations.
Houston said that Tellurian and a “few other companies” with existing permits are not impacted.
Also, these changes “benefit Tellurian as we are now one of a few facilities with uncontracted capacity for LNG deliveries in 2028,” he said.
“We have a tremendous opportunity to capitalize on this market shift as we continue to seek equity partners and sales and purchase agreements with customers for Driftwood,” Houston said.
“We are already seeing increased intensity of discussions with a wider range of potential customers and partners. This work is moving at pace. The range of potential LNG counterparties is as wide and deep as it’s ever been in my long career in this industry,” Houston said.
He said that Tellurian has expanded its outreach to customers and “are meeting the market at current terms.”
“Our approach does not radically change our model; however, it recognizes the clearing price for LNG SPAs and ensures we are positioned to match it. We are positioned well compared to other LNG sellers both in the US and internationally,” Houston said.
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The post Tellurian expects to take FID on two Driftwood LNG plants in 2024 appeared first on Energy News Beat.
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