Woodside to Acquire Tellurian, Driftwood LNG

Woodside Energy Group Ltd is acquiring all the issued and outstanding common stock of Tellurian, including its owned and operated U.S. Gulf Coast Driftwood LNG development project.

The consideration for the transaction is an all-cash payment of approximately $900 million, or $1.00 per share of outstanding Tellurian common stock. The implied enterprise value is approximately $1.2 billion, Woodside said in a statement.

Driftwood LNG is a fully permitted, pre-final investment decision (FID) development opportunity located near Lake Charles, Louisiana. The current development plan comprises five liquefied natural gas (LNG) trains through four phases, with a total permitted capacity of 27.6 million metric tons per annum (mtpa).

The foundation development includes Phase 1 (11 mtpa) and Phase 2 (5.5 mtpa). Woodside said it is targeting FID readiness for Phase 1 of the Driftwood LNG development opportunity in the first quarter of 2025.

The development is fully permitted and has a valid non-free trade agreement (FTA) export authorization. The development also recently received an extension of its Federal Energy Regulatory Commission (FERC) authorization, according to the statement.

Construction at Driftwood has started, with pilings for Trains 1 and 2 complete, foundation work in progress and pilings underway for the LNG tanks. The progress on ground work reduces the risk to the engineering, procurement, and construction (EPC) timeline and cost, Woodside noted.

“The acquisition of Tellurian and its Driftwood LNG development opportunity positions Woodside to be a global LNG powerhouse,” Woodside CEO Meg O’Neill said in the statement. “It adds a scalable US LNG development opportunity to our existing approximately 10 mtpa of equity LNG in Australia. Having a complementary US position would allow us to better serve customers globally and capture further marketing optimization opportunities across both the Atlantic and Pacific Basins”.

“The Driftwood LNG development opportunity is competitively advantaged. Woodside expects to leverage its global LNG expertise to unlock this fully permitted development and expand our relationship with Bechtel which is the EPC contractor for both Driftwood LNG and our Pluto Train 2 project in Australia,” O’Neill continued.

“Through this acquisition, we are delivering on our strategy to thrive through the energy transition. Woodside believes that LNG will play a key role in the energy transition and is well positioned to deliver the energy the world needs while delivering significant value to our shareholders,” she concluded.

The transaction is subject to satisfaction of customary conditions precedent, including maintenance of validity for existing authorizations, such as with the Department of Energy (DOE) and FERC, Tellurian shareholder approval, regulatory approval, and other approvals.

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, according to the statement.

The loan is secured by a first priority lien over the borrower’s assets subject to customary exclusions. The latest maturity date for the loan is December 15 or the date of transaction completion.

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