Aethon deals move Tellurian’s Driftwood LNG project toward development

Aethon Energy Management LLC, Dallas, has agreed to acquire Tellurian Inc.’s integrated upstream assets for $260 million, alongside a signed heads of agreement for it to purchase 2 million tonnes/year (tpy) of LNG from Tellurian’s Driftwood LNG plant, currently planned for development on the Calcasieu River, south of Lake Charles, La.

With the deal, Aethon expands its assets in the Louisiana Haynesville and Bossier shale basins with 31,000 net acres, including gathering and treating systems with capacity of up to 100 MMcfd, bringing Aethon’s pro forma gathering and treating capacity to over 3 bcfd across its entire asset portfolio.

The heads of agreement sets up negotiation of a 20-year offtake agreement indexed to Henry Hub plus a liquefaction fee, with appropriate credit support, to provide the basis for project financing of Driftwood LNG, Aethon said. Aethon will continue to explore additional opportunities to bring value to Driftwood LNG following the transaction, the company continued.

The deal is expected to close in this year’s second quarter.

Earlier this year, the US Federal Energy Regulatory Commission granted Tellurian a 3-year extension to put its 27.6-million tpy Driftwood LNG plant in service (OGJ Online, Feb. 15, 2024). The company also has received its Section 404 permit from the US Army Corps of Engineers.

Tellurian executive chairman Martin Houston said the agreements “take us several steps closer to developing the Driftwood LNG project.”