Total and Tellurian have signed a series of agreements that strengthen their partnership to develop the Driftwood LNG project in Louisiana, US.
As part of the heads of agreement (HoA) signed by the companies, Total will invest $500m in the $30bn Driftwood project and purchase one million tonnes per annum (Mtpa) of liquefied natural gas (LNG) from Driftwood.
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The HoA also specifies that the companies will sign an agreement for a further 1.5Mtpa of LNG from Tellurian Marketing’s LNG offtake volumes from the Driftwood LNG export terminal near Lake Charles, Louisiana, on the US Gulf Coast.
Under the sales and purchase agreement, Total will purchase LNG free on board (FOB) for a minimum term of 15 years.
In a separate development, Total will purchase 19.87 million shares of Tellurian common stock in a $200m deal as part of a common stock purchase agreement.
Total’s aggregate investment within the Tellurian portfolio, including its original $207m investment in 2017, will amount to $907m.
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By GlobalDataTellurian anticipates that the equity interest will represent 2Mtpa of LNG purchases.
After full construction of the 27.6Mtpa Driftwood LNG terminal, Tellurian Marketing will receive 13.6Mtpa of LNG from Driftwood.
Total chairman and CEO Patrick Pouyanné said: “The cost to produce natural gas in the US continues to fall, as the engine of American innovation finds more efficient ways to apply technology to producing its vast energy resources.
“The Tellurian team has an established track record of developing and constructing energy infrastructure on time and at the lowest cost.”
The Driftwood project includes natural gas production, gathering, processing and transportation facilities.
Driftwood LNG and Driftwood Pipeline are expected to begin construction this year and deliver the first LNG in 2023. Complete operations are expected to start in 2026.
