US-based natural gas company Tellurian is in talks with potential equity partners for its Driftwood LNG (liquified natural gas) project, reported Reuters.
The Driftwood LNG plant will be built across 1,200 acres of land on the west bank of the Calcasieu River, south of Lake Charles in Louisiana, US.
Tellurian has been finding it difficult to bring in clients and financiers for the first phase of the Louisiana project, which is valued at $14.5bn.
In an interview with the news agency, Tellurian chief executive Octavio Simoes said: “The risk of execution was not high on the list.
“But the risk of cost, yes, they have to get comfortable with.”
After two potential clients expressed doubts about Tellurian’s ability to complete the project, certain supply agreements were cancelled, which negatively impacted the project.
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According to Simoes, prospective equity partners were also considering political risks as well as image concerns associated with working on a fossil fuel project.
He went on to say that these partners can be large oil companies, LNG purchasers, end users or trading companies.
“The other type that is coming to play recently, which we are seriously considering, are people that essentially raise funds and then invest for an equity return for their fund-holders.”
Last month, Tellurian informed potential investors that it could sell the first six months of its LNG production to finance the project.
Simoes stated that by the year’s end, Tellurian still hopes to name equity partners for the project and begin commercial deliveries by 2028.
This week, Tellurian signed an agreement with Baker Hughes for the supply of refrigerant compression packages for the first phase of the project in Louisiana.
In April, Tellurian signed a deal to sell 800 acres of Driftwood LNG land for $1bn.