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LNG developer Tellurian seeks investors
The proposed Driftwood LNG terminal in the state of Louisiana is slated to begin production in 2027, with an annual capacity of roughly 11 million tonnes in the first phase.
Japanese and Indian companies are showing interest, Simoes said, adding that Tellurian is also in contact with oil majors and upstream companies. Tellurian, which plans to retain a majority stake, seeks investments from two to three companies.
Annual capacity of 11 million tonnes represents more than 10% of LNG demand in Japan, the world’s top importer of the fuel. Eventual expansion planned for Driftwood would boost capacity to about 28 million tonnes, or more than 30% of current U.S. production.
Japanese companies were involved in the launch of three U.S.-based LNG projects. Increasing imports from the U.S. would help ensure a stable supply for Japan.
U.S. engineering company Bechtel is handling Driftwood’s design, procurement and construction, with the design 80% complete. Tellurian is using revenue from shale gas production and sales for the plant construction. Simoes said the company had spent $1 billion by the end of February.
But the project was dealt a major blow when two of its top customers, Shell and energy trader Vitol, canceled long-term deals last year totaling 6 million tonnes annually. Tellurian seeks to salvage the project under an arrangement that will let equity partners offtake LNG based on their stakes.
“We continue to put together the pieces to have advanced discussions with potential equity partners,” Simoes said. “So it’s very attractive, which is why we’re quite busy.”
Multiple LNG projects are underway in the U.S. South. Venture Global LNG said on March 13 that it was proceeding with an additional investment in its Louisiana plant, with plans to produce roughly 20 million tonnes — the production could start by 2025.
Major energy company Sempra decided on March 20 to proceed with an investment in the Port Arthur LNG plant in Texas. The plant is slated to have a capacity of roughly 13 million tonnes a year and seeks to start PR
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