US-based Tellurian has terminated agreements related to its proposed Driftwood LNG export facility with French energy major TotalEnergies.
The termination of share purchase agreement and equity contribution agreement signed in 2019 also results in the expiry of the LNG offtake agreement.
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In May and June this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tonnes per annum of LNG.
In a filing with the US Securities and Exchange (SEC) commission, Tellurian said: “The Total Agreements were terminated because they are not consistent with the commercial agreements that Driftwood LNG LLC, a Delaware limited liability company and wholly owned subsidiary of Tellurian has reached with other counterparties.”
Under the deal signed in 2019, Total agreed to invest $500m into Tellurian’s proposed Driftwood LNG plant in Louisiana.
The deal also had an option for a 15-year sale and purchase agreement, where Tellurian Trading UK would supply 1.5 million tonnes per year (Mtpa) of LNG on a ‘free on board’ basis to Total Gas & Power North America.
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By GlobalDataTellurian also signed an agreement to sell nearly 20 million shares of Tellurian common stock to Total for $200m.
These agreements were subject to the relevant regulatory approvals and Tellurian making the final investment decision (FID) for the Driftwood LNG project by 10 July 2021.
Tellurian had failed to meet the deadline for announcing FID for the project, contributing to the termination of the deals with TotalEnergies.
As part of the terminated deal, TotalEnergies has agreed to purchase 19.9 million shares of Tellurian stock for a purchase price of $10.064 per share. This was subject to the satisfaction of certain closing conditions.
Tellurian is planning to start Driftwood site preparation later this summer, with construction slated to commence in the first quarter of next year, according to Reuters.
