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Last month, Australia’s Woodside acquired all issued and outstanding Tellurian common stock for about $900 million cash, or $1.00 per share. The implied enterprise value is about $1.2 billion.
Woodside also renamed Tellurian’s Driftwood LNG project Woodside Louisiana LNG and named new directors.
In February this year, Tellurian secured more time from the FERC to complete the construction of Driftwood LNG’s facilities and the associated pipeline until April 18, 2029.
Driftwood Pipeline is now seeking more time from the regulator to construct and place in service dual natural gas pipelines in Beauregard and Calcasieu Parishes, Louisiana (Line 200 and Line 300 project), according to a filing dated November 13.
In April 2023, FERC gave approval to Driftwood Pipeline to complete the project in two years.
“Driftwood Pipeline is requesting an extension of time for an additional 30 months, beyond the originally authorized in-service date, to complete construction and place the project in service by October 21, 2027,” the company said.
The project is designed to provide nominal firm transportation service capacity of up to 5,400,000 dekatherms per day (Dth/d), with a seasonal peak capacity of up to 5,700,000 Dth/d, to natural gas markets in the Lake Charles, Louisiana region, the company said.
The approximately 36.9-mile Line 200 pipeline would originate near Ragley, Louisiana, in Beauregard Parish at meter stations 1 and 2, which interconnect with Texas Eastern Transmission’s pipeline system and Acadian Gas pipeline system, respectively.
Line 200 would then extend to the southwest to its terminus at meter station 12 near Carlyss, Louisiana, at the Woodside Louisiana LNG terminal.
Moreover, Line 300 would originate at the proposed Indian Bayou Compressor Station at milepost 4.5 and be collocated with Line 200 for its entire 32.4-mile length, extending through Beauregard and Calcasieu Parishes and also terminating at meter station 12 at the LNG terminal.
Back in June 2022, Driftwood Pipeline awarded a contract to compatriot energy services firm Baker Hughes to provide electric-powered integrated compressor line (ICL) technology and turbomachinery equipment for Lines 200 and 300.
Driftwood Pipeline said it had made “good faith efforts” to complete and place the project in service in the time prescribed by the Commission, but has encountered delays resulting from “unforeseen circumstances.”
These include litigation delays from an appeal of the certificate order in the United StatesCourt of Appeals for the District of Columbia Circuit, which has been ongoing for more than a year.
“Additionally, uncertainty associated with impending changes in company leadership and other personnel related to a change in ownership of Driftwood Pipeline’s parent company further complicated efforts to reach a final investment decision, and construct and place theproject in service ,” it said.
Driftwood Pipeline said this uncertainty had been resolved by Woodside’s acquisition of Tellurian, Driftwood Pipeline’s parent company.
Despite these challenges, Driftwood Pipeline has taken “concrete steps” demonstrating its intentto move forward with the project,
These include defending the validity of the certificate order before both the Commission and the D.C. Circuit, maintaining all required permits and authorizations necessary for construction of the project, and continuing efforts to commercialize the remaining unsubscribed capacity created by the project, it said.
Driftwood Pipeline has also committed approximately $100 million in capital to advance the project, including committing to long-lead orders for critical compression equipment and backup power generation, finalizing engineering to issue drawings for construction, and making the requisite land acquisitions.
Despite these efforts, Driftwood Pipeline anticipates that it will need additional time to complete construction and place the project in service, rendering the current in-service deadline in the order “infeasible”, the company said.
“Although Driftwood Pipeline has not yet commenced construction of the Line 200 and Line 300 project, its decision to wait for the resolution of litigation acknowledges the underlying risk of proceeding with construction while its FERC authorization is pending review, as well as the recent shift in the legal landscape with respect to the D.C. Circuit’s review of the Commission-authorized natural gas infrastructure projects,” it said.
“Driftwood Pipeline’s decision not to proceed with construction during this time does not indicate any lack of interest in moving forward with the project as certificated. On the contrary, the Commission has recognized that a project developer’s intervention in appellate proceedings related to its permits sufficiently demonstrates its continued interest in the project,” the company said.
Driftwood Pipeline said it had demonstrated that “good cause exists to grant its requested extension.”
The company requests that the Commission grant this request for extension by February 28, 2025.
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The post Tellurian’s unit seeks more time to build two gas pipelines appeared first on Energy News Beat.
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