Tellurian expands on US LNG plans including Delhi Connector Pipeline from north Louisiana

Thursday, 09 May 2019
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Tellurian, the developer of the Driftwood LNG export plant near Lake Charles in Louisiana, is proceeding with its plans that now may include a fourth pipeline as it posted a larger quarterly net loss and gave more details of its costings and partnership plans.

The company said its first-quarter net loss widened to $34.12 million compared with $25.18M in the same three months of 2018.

Revenues was reported as $4.95M versus $6.80M in the same three months a year ago as Tellurian ended its first quarter with around $88.3M of cash and cash equivalents and about $57.3M of debts.

“Tellurian has a strong balance sheet consisting of approximately $384M in assets,” noted the company.

Tellurian estimates that its Driftwood LNG export plant proposed for 1,000-acre in Calcasieu Parish in Louisiana will cost around $28 billion, including construction costs, transaction expenses and contingencies, though excluding interest costs.

It intends to produce 27.6 million tonnes per annum at the Driftwood plant from 2023.

The facility will include up to 20 small-scale liquefaction Trains, three LNG storage tanks and three marine berths.

“We have entered into four lump-sum, turnkey engineering, procurement and construction agreements totaling $15.2Bln with Bechtel Oil, Gas and Chemicals Inc. for construction of the Driftwood terminal,” said the company.

Tellurian included in its quarterly highlights the signing of a heads of agreement with a subsidiary of French major Total for a $500 million equity investment in the project.

The French company also signed up for the right to purchase 1 MTPA of LNG and for a 15-year sales and purchase agreement to acquire an additional 1.5 MTPA at Japan Korea Marker (JKM) prices.

The company additionally furthered the sale of LNG and Driftwood partnership interests by completing preliminary agreements with other potential partners, including Petronet LNG of India.

“Tellurian is now permitted to construct, operate, and export LNG from the Driftwood project and has a fully articulated EPC plan in place with Bechtel,” said Chief Executive Meg Gentle.

“Our primary focus for the next quarter is finalizing the Driftwood partnership financing. Total has committed as the first partner of Driftwood and we expect to execute final agreements with them by mid-June,” added the CEO.

“We remain on schedule to produce LNG in 2023 and generate $8.00 of cash flow per share after ramp up,” stated Gentle.

Tellurian’s proposed pipelines are expected to consist of three projects, the Driftwood pipeline, the Haynesville Global Access Pipeline and the Permian Global Access Pipeline.

“We are also considering the potential development of a fourth pipeline, the Delhi Connector Pipeline, which would run approximately 180 miles from the Perryville-Delhi Hub in northeast Louisiana to Lake Charles,” explained Tellurian.

The Driftwood pipeline will be a 96-mile large diameter pipeline that will interconnect with 14 existing interstate pipelines throughout southwest Louisiana to secure adequate natural gas feedstock.

Tellurian estimates that the construction costs for the Driftwood pipeline will be $2.3Bln before other expenses.

The Haynesville Global Access Pipeline is expected to run for 200 miles from northern to southwest Louisiana.

The Permian Global Access Pipeline is expected to be 625 miles long and to run from West Texas to southwest Louisiana.

Each of these pipelines is expected to have a diameter of 42 inches and be capable of delivering approximately 2 Bcf/d of natural gas.

“We currently estimate that construction costs will be approximately $1.4Bln for the Haynesville Global Access Pipeline and $3.7Bln for the Permian Global Access Pipeline,” added Tellurian.

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