Tellurian severs Driftwood deals with TotalEnergies
US LNG developer Tellurian said July 12 that it ended investment and LNG purchase deals with TotalEnergies, a decision that could jeopardise its proposed Driftwood LNG facility in Louisiana.
In a filing with the US Securities and Exchange Commission, Tellurian said it terminated a common stock purchase agreement from April 2019 with a Delaware subsidiary of TotalEnergies, formerly known as Total. At the same time, Tellurian said that a holding company set up for the Driftwood project severed an equity capital contribution agreement from July 2019 that it made with TotalEnergies.
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Elsewhere, Tellurian said it terminated a sale and purchase agreement that gave TotalEnergies the right to buy 1.5mn metric tons/year of LNG on a free-on-board basis based on the JKM index.
“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,” the filing read.
Tellurian plans to have contracts in place covering 10mn mt/yr of LNG supply from the first 16.5mm mt/yr phase of Driftwood. The company hopes to launch the terminal in 2025, but has yet to take a final investment decision because of delays securing customers for its gas.
The decision to terminate the relationship with the French major still leaves Tellurian with some corporate support, however. In late May it reached a 10-year deal to supply 3mn mt/yr of LNG from Driftwood to Gunvor. And then in early June it agreed to sell an additional 3mn mt/yr to Vitol over 10 years, meaning it only needs to find a buyer for a further 4mn mt/yr of LNG to meet its 10mn mt/yr target.