The leaders of Tellurian Inc., Houston, said Mar. 4 they expect to take final investment decision (FID) later this year on the first two plants of the company’s 27.6-million tonne/year (tpy) Driftwood LNG plant south of Lake Charles, La.
The announcement comes about 3 weeks after the US Federal Energy Regulatory Commission (FERC) gave Tellurian’s project a 3-year extension (until April 2029) to put its plant in service (OGJ Online, Feb. 15, 2024). Driftwood was authorized by the US Department of Energy in 2019 to export LNG and thus isn’t subject to the export pause recently instituted by the Biden administration.
In an investor presentation, Tellurian leaders said construction at Driftwood is about 30% complete and has taken about $1 billion in investment so far. Executives expect to give Bechtel a full notice to proceed on the 11-million tpy, 2-plant Phase 1 portion of the project in this year's second half. FID for the roughly 5.6-million tpy Plant 3 (out of a projected five in all) is expected 6-9 months after the first decision.
Leadership change
Separately, the company’s directors will not extend or renew the contract of chief executive officer Octávio Simões beyond its initial term, which ends June 5. Simões was named both president and chief executive officer in November 2020, nearly 2 years after joining the company from Sempra LNG & Midstream. There, he had overseen the development of the 13.5-million tpy Cameron LNG plant in Hackberry, La.
Simões gave up the president role in December to former general counsel Daniel Belhumeur as part of a management reshuffling that also involved Charif Souki giving up his executive roles and company co-founder Martin Houston being named board chairman (OGJ Online, Dec. 11, 2023). Houston, who has more than 40 years of industry experience, was last week elected executive chairman.
In a letter to investors, Houston said his election is part of “a leadership succession and renewal process which will be implemented in the coming months” but did not provide details other changes that might entail. A Tellurian official said the company isn't commenting at this point about other potential hires.
The Tellurian team expects to own 35-40% of Driftwood’s first two plants and is looking for project financing. The company last month also put its Haynesville upstream assets up for sale (OGJ Online, Feb. 6, 2024).
Shares of Tellurian (Ticker: TELL) rose more than 5% to about 81 cents apiece Mar. 4 on the FID and management news. They are, however, still down more than 25% over the past 6 months and the company’s market capitalization now stands at about $630 million.
