Total Eyes $500mn Driftwood Investment (Correction)
(Corrects Total's role to JV partner from operator, adds other details)
France’s Total has pledged to invest a further $500mn in the planned Driftwood LNG export plant in Louisiana, moving the project closer to realisation, said operator Tellurian July 10.
The oil and gas major closed a deal July 10 with Houston-based project developer Tellurian establishing Total as a joint venture partner at Driftwood. Under the deal the French company will also buy 1mn mt/yr of supplies from the facility.
A sales and purchase contract has also been agreed, under which Total will buy an additional 1.5mn mt/yr of offtake from Tellurian. These volumes will be acquired free-on-board, at a price based on the Platts Japan Korea Marker.
The investment agreement at Driftwood LNG follows a deal struck earlier this year under which Total will buy $200mn of Tellurian common shares. According to Tellurian, Total’s overall outlays at Driftwood LNG should reach $907mn if the project gets the final invesment decision, expected this year. Total did not have a similar statement on its website at time of press.
“The Tellurian team thanks Total for their leadership and we look forward to beginning the largest privately-funded US infrastructure project,” Tellurian CEO Meg Gentle said in a statement, saying the Total deal valued Driftwood LNG at $13.8bn. "We intend to finalise the agreements with the remaining partners and make FID in 2019."
At full capacity Driftwood LNG will export up to 27.6mn mt/yr of LNG, which Gentle said would help reduce an oversupply of gas in the US. It will come from the Permian basin, where gas is flared as there is not enough pipeline capacity to take it to the coast.