Tellurian LNG Project Gets $207 Million Boost from Total

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Researched by Industrial Info Resources (Sugar Land, Texas)--Tellurian Investments Incorporated (Houston, Texas) heard some much-needed good news about its proposed Driftwood LNG Liquefaction and Export Terminal in Lake Charles, Louisiana: Total S.A. (NYSE:TOT) (Paris, France) agreed to buy a 23% stake in the massive liquefied natural gas (LNG) project for $207 million. Industrial Info is tracking more than $25 billion in active projects related to Tellurian's proposed LNG complex.

Tellurian is weighing the possibility of constructing up to five LNG production trains, each currently valued at about $5 billion. A single train would produce 5.2 million metric tonnes per year from four liquefaction units, each with a capacity of 1.3 million metric tonnes per year. If fully realized, the complex would produce 26 million metric tonnes per year.

Tellurian currently believes it can complete the first train in the second quarter of 2022, with another train completed roughly the same time each subsequent year. However, any number of hurdles could pop up in near or distant future, especially financing issues, that could push back any or all of the start dates. For more information, see Industrial Info's project reports on Train 1, Train 2, Train 3, Train 4 and Train 5.

Each train also would feature a pretreatment unit with a capacity of 800 million standard cubic feet per day that would be built and competed in the same time frame. For more information, see Industrial Info's project reports on the pretreatment units for Train 1, Train 2, Train 3, Train 4 and Train 5.

Total's investment comes at a time when LNG exports are being seen as a potential boon to the U.S. economy. Another such project in Lake Charles, Liquefied Natural Gas Limited's (Perth, Australia) Magnolia Project, recently was granted authorization by the U.S. Department of Energy to export LNG to countries that do not share a free-trade agreement (FTA) with the U.S. For further details, see December 13, 2016, article - Magnolia LNG Project Moves Forward with Key Approval.

Tellurian was formed by Charif Souki, a founder of Gulf Coast LNG giant Cheniere Energy (NYSE:LNG) (Houston), and Martin Houston, former chief operating officer of BG Group plc, which is now part of Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands). Late last month, the company announced it had received a $25 million investment from GE Oil & Gas, a subsidiary of Genereal Electric (NYSE:GE) (Fairfield, Connecticut). The company also had received $24 million in investments in April, plus $15 million of Souki's own money. For more information, see December 2, 2016, article - LNG Plants Don't Come Cheap: Tellurian Seeks Louisiana Project Investment.

Souki and his fellow investors are gambling that demand for LNG will grow enough in the coming years to erase the current glut in the global LNG market, which has dragged prices to lows that have hindered development. For more perspectives, see September 22, 2016, article - Survey: Executives Expect Oil & Gas Capex to Increase in 2017.

Total, for its part, said in a press release accompanying the news that it wants to double its own liquefaction capacity from its current 12 million tonnes to roughly 20 million tonnes per year by 2020. It also hopes to increase its LNG trading portfolio to 15 million tonnes per year. If these goals are met, LNG would contribute 20% of Total's output and 30% of its upstream profits by 2020, according to Reuters.

"We are happy to join forces with Tellurian, which has a very experienced team with a strong track record of developing and managing LNG assets in the U.S.," said Philippe Sauquet, Total's president of Gas, Renewables and Power, in a press release. "Investing in Tellurian at an early stage will give us the opportunity to potentially strengthen our mid- and long-term LNG portfolio, thanks to a very cost-competitive project."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.