Woodside to acquire Tellurian for ownership of permitted Driftwood LNG plant
Woodside Energy has agreed to acquire Tellurian Inc. for $900 million for ownership of the fully permitted Driftwood LNG plant under pre-final investment decision (FID) development in Louisiana. The implied total enterprise value of the deal, including net debt, is about $1.2 billion.
“After careful consideration of Tellurian’s opportunities and challenges, the Board and senior management weighed an immediate and significant cash return against the risks and costs associated with the timeline to FID and determined that this offer is in our shareholders’ best interest,” said Tellurian executive chairman Martin Houston.
In a separate release, Woodside chief executive officer Meg O’Neill said acquisition of the Driftwood LNG opportunity positions Woodside to be “a global LNG powerhouse,” adding “a scalable US LNG development opportunity to [Woodside’s] existing approximately 10 million tpy of equity LNG in Australia.”
Driftwood LNG
Driftwood LNG is a fully permitted, pre-FID proposed plant sited near Lake Charles, La. The current development plan comprises five LNG trains through four phases. The foundation development includes Phase 1 (11 million tpy) and Phase 2 (5.5 million tpy).
Woodside is targeting FID readiness for Phase 1 from first-quarter 2025, with development costs of $900-960/tonne for phases one and two. Construction has begun, with pilings for Trains 1 and 2 complete, foundation work in progress and pilings under way for the LNG tanks.
In connection with entry into a binding agreement to acquire Tellurian, Woodside will provide a loan to Tellurian of up to $230 million to ensure Driftwood LNG site activity and de-risking activities maintain momentum prior to completion of the transaction. The loan is secured by a first-priority lien over the borrower’s assets subject to customary exclusions.
The deal includes $50 million for Tellurian’s Series C Convertible Preferred equity shares, about $90 million of net debt, a $90 million net working capital adjustment, $65 million for management and debt change of control costs. Closing is expected in this year’s fourth quarter, subject to customary closing conditions, including approval from Tellurian shareholders and receipt of regulatory approvals.
