Driftwood LNG gets another three years to finish construction
FERC gives Tellurian additional time to bring facility into operation
US regulators have granted Tellurian a three-year extension for the construction of Driftwood LNG, bringing the Houston-based player some relief for the beleaguered $25 billion liquefied natural gas export terminal.
The Federal Energy Regulatory Commission (FERC) gave Driftwood LNG until 18 April 2029 to wrap up construction of the facility, which began in early 2022, even though Tellurian has yet to take the final investment decision on the project.
FERC’s original April 2019 order approving construction had a 2026 deadline.
The FERC decision is a sigh of relief for Tellurian and its 27.6 million tonnes per annum Driftwood facility located near Lake Charles, Louisiana, which is still expected to deliver LNG by 2028.
The terminal has LNG export approval from the US Department of Energy.
“We are grateful for FERC’s diligence and thank the commissioners for this extension,” a Tellurian spokesperson said.
“Tellurian will continue with construction of Driftwood LNG and use this momentum to further our commercial discussions.”
Once commanding five long-term offtake agreements, Driftwood caused concern among analysts as those contracts began to wither in 2022. The terminal lost its last known foundation customer in August.
In an attempt to keep the project afloat, Tellurian sold 800 of Driftwood’s 1200 acres in April 2023 to a New York investor, Blue Owl Real Estate Capital, which agreed to lease the land back to Tellurian.
Amid the financial woes, Tellurian ousted co-founder Charif Souki as its chairman, giving him an $8 million severance package in the process. Co-founder Martin Houston took Souki’s place.
Tellurian admitted in US Securities & Exchange Commission filings in November that with only $60 million on hand, the fate of the company was hanging in the balance beyond the next year.
The Houston firm has hit back at speculation that it will be sold. However, the company is exploring a sale of its upstream business, which includes 31,149 net acres and interests in 159 producing wells in the Haynesville Shale that produced 19.5 billion cubic feet of natural gas in the third quarter of 2023.
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