Total Plans To Purchase LNG From Tellurian’s Driftwood Project

On Wednesday, Tellurian Inc. reported that parts of French oil major Total SA will be buying one million tons per annum (mtpa) of LNG from the $30 billion Driftwood export project in Louisiana. Total plans to purchase an extra 1.5 mtpa of LNG from Tellurian’s off take volumes, invest $500 million in Driftwood Holdings LP, and buy about $200 million of Tellurian shares.

The Driftwood Pipeline LLC, controlled by Tellurian, has been looking into the construction of a pipeline that would deliver gas to the Driftwood LNG facility. It would run 96 miles in length, consisting of 74 miles of 48-inch pipe, and transport 4 bcf/d of natural gas on average to the facility. The expected production by Driftwood is about 4 billion cubic feet per day (bcfd) of natural gas, which is enough energy for about 5 million U.S. homes for a day.

If Tellurian’s final investment decision is made in 2019, the Driftwood plant could begin service in 2023. When the final decision is made, Total’s aggregate investment in Tellurian is estimated to be around $907 million.

According to the U.S. Energy Information Administration, Total’s world demand for LNG is expected to rise by almost 100 mtpa by 2023. Currently their demand sits at a record high of 316 mtpa.

Tellurian is unique among most U.S. LNG export projects as they offer customers the ability to invest in a full range of services, such as production, pipelines and liquefaction.

Pipeline & Gas Journal