Tellurian announced that its wholly owned subsidiaries, Driftwood LNG LLC and Driftwood Pipeline LLC have completed the pre-filing phase and collectively submitted a formal application with the US Federal Energy Regulatory Commission (FERC) to construct and operate an approximately 26 MMT/Y LNG export facility near Lake Charles, Louisiana and a 96-mile pipeline connecting the facility to interstate pipelines (the Driftwood LNG project).
Tellurian expects to begin construction of the Driftwood LNG project in 2018 and produce first LNG in 2022, with full operations beginning in 2025.
"Throughout the pre-filing phase, the representatives at FERC, the Department of Energy and the US Coast Guard have been well-organized, thorough, and proficient in ensuring that Driftwood LNG is designed and permitted with a priority on safety, reliability, and efficiency. We look forward to continuing to work with FERC and other agencies on a timely approval process and beginning construction in 2018."
The Driftwood LNG project will require approximately 6,400 workers during the construction phase, and will create nearly 400 new permanent jobs when fully operational. Tellurian expects that the project’s costs will be approximately $13 - $16 billion for the Driftwood LNG export facility and expects to make a final investment decision to begin construction following regulatory approval in mid-2018.


Updates:

On 9 Aug. 2017, Tellurian announced that the FEED study for its Driftwood LNG project has been completed by Bechtel as it has also submitted a lump sum turnkey EPC proposal for the project which enhances cost certainty and will support commercial and financing discussions. “We anticipate executing a binding EPC agreement with Bechtel this autumn, and we intend to begin producing LNG in 2022.”
On 23 Oct. 2017, Reuters reported that Tellurian is offering billions of dollars in equity in its Driftwood project to make it more attractive for buyers as it is offering 60 percent to 75 percent equity interest in Driftwood Holdings, which comprises Tellurian’s upstream company, its pipeline and the upcoming terminal that can export 27.6 MMT/Y of LNG.
It will charge $1.5 billion payable over a four-year period for 1 MMT/Y of LNG, or $1,500/MT for the equity, Martin Houston, co-founder and vice-chairman of the firm, told the media.
On 13 Nov. 2017, Tellurian and Bechtel announced that they have entered into four fixed price, lump sum turnkey agreements totaling $15.2 billion for the EPC of the proposed Driftwood LNG project includes: 20 liquefaction trains, each expected to produce up to 1.38 MMT/Y of LNG; Liquefaction technology from Chart Industries' proprietary Integrated Pre-cooled Single Mixed Refrigerant (IPSMR®) process; 20 GE refrigeration compressors, each driven by GE aero derivative natural gas turbines; Three 235,000-CM, full containment LNG storage tanks; and Three marine loading berths. "The agreements with Bechtel guarantee performance and secure the EPC cost of Driftwood LNG at $550/MT"
Tellurian said that Driftwood LNG will be constructed in four phases, with each phase beginning operations on a staggered basis: Phase 1: Up to 11 MMT/Y of LNG from 8 trains, storage tanks 1 & 2, loading berth 1 and related utilities; Phase 2: Up to 5.5 MMT/Y of LNG from 4 trains, loading berth 2 and related utilities; Phase 3: Up to 5.5 MMT/Y of LNG from 4 trains, storage tank 3, loading berth 3 and related utilities; Phase 4: Up to 5.5 MMT/Y of LNG from 4 trains and related utilities.
All four contracts specified that the prices would be valid only if Tellurian makes a positive investment decision by the end of next year for each respective phase.
Meanwhile, according to copies of the contracts that Tellurian submitted to the US Securities and Exchange Commission (SEC), it has confirmed that the first phase of the Driftwood LNG would have a unit cost 27% higher than the average unit cost for all four planned phases ($550/MT) as the first phase would cost $7.678bn for capacity of 11 MMT/Y or $698/MT of annual production.
The initial phase would be more expensive because the project would be built at a greenfield site. Later phases would be cheaper because they would use some existing infrastructure. Phase 2 would cost $2.71bn for additional capacity of 5.5 MMT/Y, for a unit cost of $493/MT, Phase 3 would add 5.5 MMT/Y of capacity for $2.743bn, for a unit cost of $499/MT and Phase 4 would add 5.5 MMT/Y of capacity for $2.103bn, or a unit cost of $382/MT of annual production. It would be the cheapest phase because it would not include additional storage tanks or berths.