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
EDF Renewables, SCPPA Sign PPA for Bonanza Solar
2024-02-28 - The site is expected to start delivering electricity to SCPPA’s customers by Dec. 31, 2028.
Equinor Brings Solar Plant Online in Brazil
2024-03-08 - Equinor says the Mendubim solar plant will produce 1.2 terawatt hours of power annually.
Equinor Acquires Stake in Standard Lithium Smackover Projects
2024-05-08 - Equinor’s transaction, completed effective May 7, includes interests in Standard Lithium’s flagship South West Arkansas Project and East Texas properties.
TotalEnergies Cements Oman Partnership with Marsa LNG Project
2024-04-22 - Marsa LNG is expected to start production by first quarter 2028 with TotalEnergies holding 80% interest in the project and Oman National Oil Co. holding 20%.
Emeren, Glennmont to Develop 155 MW of Battery Storage Projects
2024-03-15 - The collaboration between Emeren Group and Glennmont Partners marks a strategic move to enhance renewable energy storage capacity in the region.