LNG

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.

Tellurian Inc. said it welcomed the issuing of the order from the US Federal Energy Regulatory Commission granting authorization for its Driftwood LNG export project to go ahead at Lake Charles in Louisiana.

Tellurian Inc. developer of the Driftwood LNG project in Louisiana backed by companies such as French energy major Total, has launched an open season for its Permian Global Access Pipeline to secure prospective customers.

The Permian Global Access project is a proposed 42-inch diameter inter-state natural gas pipeline originating at the Waha Hub in Pecos County in Texas and terminating at Gillis in Louisiana, north of Lake Charles where the liquefaction plant will be constructed.

The final environmental impact statement was issued by the US Federal Energy Regulatory Commission in January 2019 to develop the Driftwood liquefaction plant to produce around 27.6 million tonnes per annum of LNG.

The pipeline will connect the prolific Permian Basin in Texas to the rapidly growing natural gas market in southwest Louisiana.

“It will cost approximately $3.7 billion to construct and will have the capacity to transport at least two billion cubic feet of natural gas a day,” said Tellurian.

“Construction could begin as early as 2021 and the pipeline is targeted to be in service as early as 2023,” added the company.

Tellurian is also developing a second pipeline venture called the Haynesville Global Access Pipeline at around the same cost.

In addition to spending $7.4Bln on the two pipelines, Tellurian is developing the liquefaction plant near Lake Charles with total investments of around $15.2Bln and the provision of about 15,000 jobs.

“Permian producers have recently paid $9.00 per million British thermal units to move their natural gas away from the wellhead, reflecting the acute need for infrastructure development in the Basin,” said Tellurian Chief Executive and President Meg Gentle.

“By contrast, Southwest Louisiana is a market expected to grow 300 percent in the next five years,” added Gentle.

“The Permian Global Access Pipeline is critical infrastructure that will interconnect stranded Permian gas production with growing markets, reduce flaring and provide a valuable cleaner fuel to reduce urban pollution and carbon globally,” stated the CEO.

The open season was scheduled to begin at noon Central time on April 8 and runs to Friday, May 24.

Tellurian said it would encourage interested parties to contact Joey Mahmoud, President of the Permian Global Access Pipeline project, at the pipeline company website.

The pipeline open season follows recent advances in the LNG project with Total signing two accords to invest more in the development company and to take its supply requirements from the venture to 2.5 MTPA of LNG.

The sales agreement will be for the purchase of free-on-board (FOB) whereby Total supplies the shipping and for a minimum term of 15 years and based on the Platts Japan Korea Marker (JKM) price.

Total’s equity agreement gives the French company an additional 20 million shares of Tellurian common stock for an amount of $200 million, adding to its previous investment.

Tellurian Inc., developer of the Driftwood LNG export project in Louisiana, is expecting to have about six customer-partners when it takes its final investment decision for the first phase of the joint venture near Lake Charles that will cost a total of $30 billion.

Tellurian Inc., developer of the Driftwood LNG export project in Louisiana, ended its year with a loss of around $125.7 million, as it made commercial progress on its plant to be constructed near Lake Charles with affiliated pipelines.

Tellurian, listed on the Nasdaq exchange, said it ended the year with $133.7M of cash and cash equivalents and about $57.0 million in debt.

The final environmental impact statement was issued by the Federal Energy Regulatory Commission in January 2019 to develop the liquefaction plant to produce around 27.6 million tonnes per annum of LNG.

Tellurian stands ready to make a final investment decision and begin construction in the first half, with the first LNG expected in 2023.

In its initial trading operations, Tellurian generated $5.9 million in revenue from LNG marketing and around $4.4M from natural gas sales.

It also received a $50 million investment from US energy and LNG engineering company Bechtel, which will organise the building of the plant.

“The company advanced the sale of LNG and Driftwood Holdings’ partnership interests, with approximately 35 customer-partners conducting due diligence,” said Tellurian.

Among other highlights it signed two accords, one with commodities firm Vitol for the supply of 1.5 MTPA of LNG for 15 years and a second with Petronet LNG of India for equity investment in the Driftwood project.

Tellurian additionally closed two open seasons on proposed pipelines, the Permian Global Access Pipeline and the Haynesville Global Access Pipeline, and received non-binding indications of interest for both projects in excess of available capacity.

“Tellurian distinguished itself in the market through our innovative equity interest investment strategy, and by introducing a new pricing benchmark for LNG agreements,” said President and Chief Executive Meg Gentle.

The CEO was referring to pricing being offered to customers on the Platts Japan Korea Marker (JKM) instead of the US benchmark Henry Hub price.

“We recently received our final Environmental Impact Statement for Driftwood LNG and look forward to receiving our Federal Energy Regulatory Commission order to proceed,” added Gentle.

Tellurian Inc, the developer of the Driftwood LNG export plant in Louisiana, said it had around 25 potential customers lined up who have expressed an interest in its full range of energy services from feed-gas pipeline delivery to liquefaction tolling.

Tellurian Inc., developer of the Driftwood LNG export project in Louisiana, has priced a public offering of its Nasdaq-listed shares to raise almost $120 million as it continues with its large-scale liquefaction and pipeline plans on the Gulf Coast.