Tellurian Provides Update on Driftwood LNG Project
The company deferred three of four pipelines as it continues to push toward final investment decision.
Tellurian reduced its capital cost and will defer some proposed pipelines for the first phase of its 27.6-mtpa Driftwood LNG project in Lake Charles, Louisiana, as it works toward securing financing and construction.
During an investor presentation the company said it reduced capex by 30% to $1,042/tonne, which amounts to a total cost of $16.8 billion. The deferred pipelines include the Global Access Pipeline, Haynesville Permian Global Access Pipeline, and Delhi Connector Pipeline—each with capacity of 2 Bcf/D, leaving the 4 Bcf/D Driftwood Pipeline, which has already been approved by the Federal Energy Regulatory Commission (FERC).
The project is shovel ready with approval from FERC and the US Department of Energy. Driftwood has a $15.5-billion engineering, procurement and construction contract with Bechtel that guarantees cost, performance, and schedule. Engineering is 30% complete with the company having invested about $150 million.
The company extended its memorandum of understanding in February with Petronet LNG Ltd. to negotiate the purchase of up 5 mtpa of LNG from the Driftwood project, concurrent with an equity investment in Driftwood Holdings.
Final investment decision has been delayed, but the project is targeting production by 2024.