HOUSTON—The main issue confronting Tellurian Inc. at the moment is finding partners and not off-takers for gas to eventually flow from the company’s Driftwood LNG project, Executive Chairman Charif Souki told Hart Energy during CERAWeek by S&P Global.
“Off-takers are not very important because we are selling gas on the global gas market [with] global gas prices. We can replace those off-takers any time we want—it is not a problem,” Souki said on the sidelines of the annual event. “The issue is the partners. This is the key thing.”
Tellurian has already invested $1 billion in Driftwood LNG, and the executive believes it can finance about $7 billion-$8 billion with traditional financial institutions. The company is still seeking between $2 billion-$3.2 billion from partners.
RELATED
Tellurian Eyes $3.2 Billion in Equity for Driftwood LNG
“That’s what really matters,” Souki said, referring to the equity to come from future partners.
“Clearly, the market is getting a lot better for us because all the major companies around the world are making money hand over fist,” Souki said. “So, if you’d asked me 18 months ago, I would have said it makes sense, however, who’s got money? Now, we know who has money.”
Driftwood LNG is a potential component in the U.S. effort to boost LNG exports to world markets still feeling the negative impacts of reduced energy flows from Russia following that country’s invasion of Ukraine.
Driftwood LNG Phase I is a two-plant development to provide 11 million tonnes per annum (mtpa) by early 2026. Phase II is a three-plant development that would provide an additional 16.6 mtpa.
Tellurian still hopes to get Phase 1 online by late-2026 or early-2027. The company continues to move forward with construction activities and looks to finance Phase II with cash flow from Phase 1.
RELATED
Tellurian Production, Revenues Soar in Q4 as Driftwood LNG Remains on Track
“Bechtel is still working hard on the site and has a few hundred people on the site, but would like to have a few thousand,” Souki said, adding funding from partners would allow that to happen.
Steady production this year and next
Souki expects U.S. gas prices to remain weak over the near-term, but is optimistic prices will rebound do to the cyclical nature of the industry.
“We’ve had two very good years,” Souki said. “We took advantage to build our production, and what we are not going to stop is [increasing] our footprint. So, we continue to acquire acreage and a position with the knowledge that in four or five years we’ll be selling gas on the global markets.”
Tellurian will keep production stable in the 225 MMcf/d range until domestic prices rebound over the next year-and-a-half to two years, he said.
Recommended Reading
Baker Hughes Wins Contracts for Woodside’s Louisiana LNG Project
2024-12-30 - Bechtel has ordered gas technology equipment from Baker Hughes for the first phase of Woodside Energy Group’s Louisiana LNG development.
SM Energy Adds Petroleum Engineer Ashwin Venkatraman to Board
2024-12-04 - SM Energy Co. has appointed Ashwin Venkatraman to its board of directors as an independent director and member of the audit committee.
Gigablue Enters CCS Agreement with Investment Firm SkiesFifty
2025-01-14 - Carbon removal company and investment firm SkiesFifty have partnered to sequester 200,000 tons of CO2 over the next four years.
Chevron Names Laura Lane as VP, Chief Corporate Affairs Officer
2025-01-13 - Laura Lane will succeed Al Williams in overseeing Chevron Corp.’s government affairs, communication and social investment activities.
Plains All American Prices First M&A Bond of Year
2025-01-13 - U.S. integrated midstream infrastructure company Plains All American Pipeline on Jan. 13 priced a $1 billion investment-grade bond offering, the year's first to finance an acquisition.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.