US operator Tellurian, which is developing the Driftwood liquefied natural gas export facility in Louisiana, will consider pursuing two more projects in the future as it looks eventually to take a share of up to 10% of the global LNG market.

Chief executive Meg Gentle told Upstream last week that the plans are “very much in concept” at this point. “We’re always looking for real estate and projects and don’t have anything specifically in the project pipeline yet,” she said at the Gastech conference in Houston.

While the current focus is on getting the nearly 28 million tonnes per annum Driftwood LNG project to a final investment decision, once construction commences Tellurian will shift attention to building up its marketing side, which will retain around 14 million tpa from the terminal.

“We’ll be delivering LNG from that portfolio (free on board, delivered ex-ship), short term, medium term, long term, and we’ll be looking to add positions to that portfolio both to add more supply to it and also to add downstream positions that help us earn wider margins than you would get just selling it off the market index,” Gentle said.

Beyond that, Gentle believes Tellurian can potentially supply as much as 60 million tpa, or 10% of the LNG market, in 2025.

“It’s a good number that gets you to scale and as we are entering a commodity business... we have to be able to be low-cost,” she said.

“So we do that from having low-cost construction, low-cost access to capital and, frankly, getting to scale, so we can have the relationships to be able to earn wider margins and keep our costs really low.

“So there’s nothing magic about 10%, although it’s a nice round number and it’s really a size of portfolio that gets you to scale.”

The Driftwood project got a boost earlier this week with the announcement that India’s Petronet has signed a memorandum of understanding with Tellurian for an equity stake in the project as well as the purchase of 5 million tpa of LNG from the terminal.

Financial details on the deal were undisclosed but Tellurian has targeted equity investments of $500 million per 1 million tpa.

The value of Petronet’s equity investment has been reported to be $2.5 billion, while the state-run company is expected to commit an additional $5 billion of debt financing in conjunction with the offtake agreement.

The deal is targeted to be finalised by 31 March 2020.

Petronet is Tellurian’s second announced partner on Driftwood LNG after French major Total, which is to inject a total of $700 million in equity investment.

A $500 million portion of the investment relates to the purchase of 1 million tpa from Driftwood LNG and gives Total a 3.6% stake in the project.

Using those metrics, Petronet’s deal would give it an 18% stake in the project.

A separate sales and purchase agreement (SPA) with Total allows for the purchase of a further 1.5 million tpa from Tellurian Marketing’s offtake volumes from the project.

Tellurian has also signed an SPA for 1.5 million tpa with Swiss trading house Vitol.

Gentle told Upstream last week that she expects to announce the remaining equity partners on the project later this year. Overall, the company has agreements for 8 million tpa out of the 12 million tpa that will be sold to third parties.

A final investment decision on Driftwood is now expected late this year or early next year, with construction to start in 2020 and first LNG in 2023.

In a note, Cowen analysts said it could take even longer. The financial services firm projects a 2021 sanctioning and 2024 start-up for the facility. Tellurian had originally expected to sanction the project in the first half of 2019 but Gentle chalked the delays up to permitting challenges.

“We took longer in permitting than we thought,” she said, adding that whereas domestic rival Cheniere received its permits in 11 months, it took Tellurian three years to receive its permit from the US Federal Energy Regulatory Commission.

However, pre-sanction work has proceeded better than expected, with engineering work more than 25% complete on the Driftwood site.

“Most LNG facilities can begin construction at 8% to 10% engineering complete and... once you get to around a 28% engineering complete threshold you can start ordering major equipment,” Gentle said.

“So we’re even a little bit beyond that and... even though we haven’t triggered a formal notice to proceed under the EPC contracts, we’ve been continuing to move forward.”

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Tellurian looking to build beyond Driftwood