LNG

Tellurian Inc., the developer of the Driftwood liquefied natural gas export plant near Lake Charles in Louisiana, increased third-quarter natural gas production and revenues as it continued to progress with the financing of the venture and discussions with counterparties for offtake and equity.

Tellurian produced 19.5 billion cubic feet of natural gas for the quarter to the end of September compared with 11.4 Bcf for the same period of 2022.

The Houston-based company’s natural gas assets included 31,149 net acres and interests in 159 producing wells.

Its main production area of operations is the Haynesville Basin covering northwest Louisiana and East Texas.

Tellurian posted a loss of $12.55 million in the quarter compared with a profit $40.07M in the same quarter of 2022.

For the nine months the losses came to $44.23M versus a profit of $83.17M in the prior-year period.

Revenues

Tellurian generated around $43.2M in revenues from natural gas sales in the third quarter compared with $81.1M in the third quarter of 2022, a change driven by decreased realized natural gas prices partially offset by increased production volumes.

Tellurian reported a net loss of approximately $65.4M, or $0.12 per share (basic and diluted), for the quarter compared with a net loss of about $14.2M, or $0.03 per share (basic and diluted), for the same period of 2022.

As of the end of September, Tellurian said it had approximately $1.3Bln in total assets, including $59.3M of cash and cash equivalents.

“Tellurian’s upstream segment continues to provide growing natural gas production, improving significantly over the third quarter of last year, and we see natural gas prices on the rise through year end,” said President and Chief Executive Octávio Simões.

“We are having a number of discussions with counterparties for both equity partnership and LNG offtake for the Driftwood project and investment in the Driftwood Line 200/300 pipeline,” Simões explained.

Investments

“We have invested over one billion dollars to develop and advance construction of the fully permitted Driftwood project and remain on target to produce first LNG in 2027,” Simões stated.

The Driftwood project involves constructing 20 mid-scale processing Trains, each with 1.38 MTPA of capacity and built as five blocks of four Trains.

The Phase One development would include the first two of these blocks for 11 MTPA of output and two of three planned 235,000 cubic metres storage tanks and the first of three planned loading berths for LNG carriers.

Tellurian also signed an accord in April 2023 to sell the site of the Driftwood plant to institutional investors for $1Bln and to lease back the site comprising 800 acres of land.

Tellurian’s main contractor for the Driftwood construction is the US engineering company Bechtel Energy.

In September 2023, Tellurian signed an agreement with US LNG-equipment supplier Baker Hughes to secure a delivery schedule for eight LM6000PF+ gas turbines, main refrigerant compressors and control units required for Phase One construction.

Tellurian said the agreement supported its aim of having the Driftwood venture achieved initial LNG production in four years’ time.

Tellurian Inc., the US developer of the Driftwood LNG export project at Lake Charles in Louisiana, has signed its first landmark LNG supply deal with international commodities company Gunvor to give the joint venture momentum.

Gunvor trades in energy from its main offices in cities such as Geneva in Switzerland, Singapore, the Chinese city of Shanghai and Houston in Texas and its agreement with Tellurian was signed by Gunvor Singapore Pte Ltd.

Tellurian's transaction with Gunvor is a sales and purchase agreement (SPA) for 3 million tonnes per annum of cargoes for a period of 10 years,

“The volumes will be indexed to a combination of two indices, the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), netted back for transportation charges,” said Tellurian.

The LNG would be delivered on free-on-board (FOB) basis from the Driftwood facility, the project on the Gulf Coast with proposed total output of 27.6 MTPA.

The Gunvor’s global commodities business already involves almost 18 MTPA of traded LNG cargoes.

“Tellurian intends to market up to 10 MTPA of LNG in our first phase on a JKM, TTF or blended price basis, as our integrated model provides the flexibility to offer this valuable product,” explained Tellurian President and Chief Executive Octávio Simões.

“We welcome Gunvor, the largest independent global trader of LNG volumes, to Driftwood and look forward to providing a cleaner fuel to meet growing global energy needs,” stated Simões.

Tellurian had hinted in its first-quarter earnings report at the start of May 2021 that the improving market favoured the signing soon of supply agreements.

The Houston, Texas-based company said it continued to build its Gulf Coast natural gas business and had concentrated on paying down debt.

The overall project plan for Tellurian now is for the Driftwood liquefaction plant to have first-phase production of 16 MTPA, rising to over 27 MPTA with expansions.

Tellurian produced 3.3 billion cubic feet of natural gas for the quarter in the Haynesville shale basin in north Louisiana.

Tellurian’s upstream assets include 9,704 net acres and interests in 72 producing wells.

The company ended the first quarter with around $58.7M of cash and cash equivalents and generated $8.7M in revenues from natural gas sales.

Tellurian added that it still had a strong balance sheet consisting of around $270.3M in total assets.

Charif Souki, the Executive Chairman of Tellurian, said in a presentation last month that the use of the gas-fired power option was growing in Asia and his company hoped to start finalising commercial agreements based on the current “very strong gas market fundamentals” in Asia and Europe.