Tellurian, Total finalize Louisiana Driftwood LNG export plant agreements

July 10, 2019

 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc said on Wednesday that units of French oil major Total SA have agreed to buy LNG from the U.S. company’s proposed $30 billion Driftwood export project in Louisiana.

Total will buy one million tonnes per annum (mtpa) of LNG from Driftwood and invest $500 million in Driftwood Holdings LP, it said in a statement.

Total will also buy an additional 1.5 mtpa of LNG from Tellurian’s offtake volumes from Driftwood. The deal involves LNG free on board at a price based on the Platts Japan Korea Marker (JKM).

Tellurian said it planned to make a final investment decision this year on whether to build Driftwood, which would enable the plant to enter service in 2023.

“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,” Tellurian President and Chief Executive Meg Gentle said in the statement.

Driftwood is designed to produce 27.6 mtpa of LNG or about 4 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day.

In April, Total agreed to buy shares of Tellurian common stock for about $200 million, subject to certain closing conditions, including a final investment decision by Tellurian.

Tellurian said Total’s aggregate investment in the Tellurian portfolio will be about $907 million at the time of the final decision to build the plant.

Driftwood is one of about a dozen U.S. LNG export projects that said they could make final investment decisions in 2019. Together the plants, which analysts said will not all be built, would produce over 150 mtpa of LNG.

Total world demand for LNG reached a record 316 mtpa in 2018 and is projected to soar by about 100 mtpa by 2023, according to the U.S. Energy Information Administration.

Unlike most proposed U.S. LNG export projects that will liquefy gas for a fee, Tellurian is offering customers the opportunity invest in a full range of services from production to pipelines and liquefaction.

Current partners include units of Total, Vitol, Petronet LNG Ltd, General Electric Co and Bechtel, which has a $15.2 billion contract to build the liquefaction facility. Pipelines, reserves and other expenses make up the rest of the project’s cost.

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Cheniere, Bechtel hit milestone for Corpus Christi LNG project 

Marissa Luck July 10, 2019

Houston's Cheniere Energy and engineering and construction firm Bechtel have completed the first commissioning cargo of liquefied natural gas at the second liquefaction plant in Corpus Christi as the project gets closer to starting up.

Cheniere confirmed Tuesday that the second plant, called Train 2, has produced enough volume of LNG to produce a first commissioning cargo, an important milestone as the project gears up for start up later this year.

Late last year, the Corpus Christi LNG project made history when a tanker named the Maria Energy left the company's Corpus Christi facility on Dec. 11 carrying the first LNG export shipment from Texas oil. The company is getting closer to finishing its second plant, Train 2, at the site and construction on a third plant, called Train 3, will be complete in 2021.

"We are pleased to have achieved another key milestone, LNG First Cargo, on the Corpus Christi Liquefaction Train 2, as part of the Commissioning and Startup process. This is the result of thoughtful planning and execution, and excellent teamwork with Bechtel," said David Craft, Cheniere's senior vice president Engineering and Construction in a July 2 statement. "Together we will continue to work towards reaching other milestones for the Corpus Christi facility, including completion of Train 2 later this year and Train 3 in 2021."

The three plants will bring the Corpus Christi project's capacity to 13.5 million metric tons per a year.  That will be followed by a third stage of development to take the project to 23 million metric tons, according to a Cheniere Energy spokeswoman.

Through its partnership with Cheniere, Virginia-based Bechtel has now delivered seven LNG trains at two sites on the U.S. Gulf Coast since 2015. Globally Bechtel has delivered 15 large-scale LNG production units, including eight projects in Australia.  Bechtel-delivered facilities account for roughly one-third of the global LNG capacity, supplying about 61 million tonnes of LNG each year, or enough energy to power more than 85 million homes.

Bechtel also is working with one of Cheniere's competitors on the Gulf Coast, Tellurian Inc. which is building the Driftwood LNG export terminal outside of Lake Charles, Louisiana.



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