According to information disclosed by S&P Global Platts, Houston-based natural gas company Tellurian plans to produce all the output it will need to feed the proposed Driftwood LNG export terminal in Louisiana. In fact, S&P covered this story through an interview with Tellurian CEO Octavio Simoes on March 25.
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Tellurian on producing needed LNG before sanctioning Driftwood LNG
This Thursday, Tellurian CEO Octavio Simoes told in an interview with S&P Global Platts, the company will produce the needed output to feed the Driftwood LNG export terminal in Louisiana.
Accordingly, the developer will not sanction the LNG project until without sufficient upstream reserves for the 16 million mt/year first phase of the facility. In fact, it consists of an up to 27.6 million mt/year facility.
Therefore, the company has a lot of drilling rights to acquire before it can meet its goal. In fact, the Company only has a small acreage position in Louisiana’s Haynesville Shale.
A strategic upstream move
Moreover, the CEO stated that this upstream move is necessary to make feasible another update to the company’s strategy.
In fact, Tellurian is offering 10 million mt/year of Driftwood supply for a 10-year term for the price of the monthly Platts JKM assessment or Dutch TTF index, minus the cost of shipping.
Thus, Tellurian hopes to alleviate one measure of volatility by eliminating the US Henry Hub gas price from the equation. Thus far, it has prevented it and many of its North American competitors from building.
“We adapt to the circumstances and are not afraid to move to what works,” said Simoes.
