Several US energy executives’ recent comments about their interest in investing in liquefied natural gas (LNG) projects are “a very encouraging signal” for the financing prospects of Tellurian Inc.’s $12-billion liquefaction plant in Louisiana, the company’s executive chairman said this week.
Speaking on a short video posted to Tellurian’s YouTube channel, Charif Souki said he is optimistic Tellurian, Houston, can soon find one or more equity partners for the 27.6-million tonne/year (tpy) Driftwood LNG plant in Calcasieu Parish in the southwestern corner of Louisiana.
“It should not be very difficult for us to be able to negotiate some deal in the next few weeks,” Souki said before adding that it’s also possible financing talks don’t result in any sort of agreement.
Souki, who built Cheniere Energy before helping launch Tellurian, said he took note of remarks from his peers at a handful of companies about their desire to take part in the LNG boom, specifically with an eye to exporting the commodity. He named EQT Corp., Chesapeake Energy Corp., Comstock Resources Inc., Devon Energy Corp., Coterra Energy Inc., and Antero Resources Corp. and their strong cash flows, noting funding commitments from just a few firms would get Tellurian to its goal of raising $4 billion in equity before looking to finance the rest of Driftwood with bank debt.
“That is absolutely the right business model for growth – American producers and energy companies in the United States,” Souki said. “Giving foreign companies access to American gas at a discounted price makes absolutely no sense.”
Tellurian started construction on the first phase of Driftwood about 6 weeks ago and expects to bring the project, which will have a capacity of 11 million tpy, online by 2026 (OGJ Online, Mar. 28, 2022). The company last week reported a first-quarter loss of about $67 million while producing $26 million in revenues from natural gas sales (OGJ Online, May 5, 2022).
In the video, Souki reiterated President and Chief Executive Officer Octávio Simões’ comments then that Tellurian is on track to produce 200 MMcfed by yearend and that the number should grow 50% in 2023 as the company adds roughly a dozen wells annually to its network.
Shares of Tellurian (Ticker: TELL) were down nearly 2% to $3.78 in afternoon trading May 12. They have risen about 10% year to date.