TOTAL, Tellurian Ink Deal Related To Driftwood LNG Project
Zacks Investment Research | Apr 08, 2019 08:40AM ET
TOTAL SA (NYSE:TOT) and Tellurian Inc — a company based in the United States — have inked several deals to develop the Driftwood liquefied natural gas (LNG) project in Louisiana.
Recently, the parties have inked a non-binding heads of agreement (“HOA”). Per the terms, TOTAL will invest in Driftwood Holdings and offtake 2.5 million tons per annum (mtpa) of LNG.
Also, the companies will enter into a binding sales and purchase agreement (SPA) to take 1.5 million tons per annum of LNG from Tellurian Marketing’s LNG offtake volumes from the Driftwood project.
The deal involves an equity investment of $500 million by TOTAL in Driftwood LNG along with the purchase of an additional 1 mtpa of LNG from the proposed project.
The SPA relates to the procurement of LNG on a free-on-board (FOB) basis for a minimum of 15 years. The price will be based on Platts Japan Korea Marker (JKM).
Additionally, TOTALwill purchase about 20 million shares of Tellurian common stock for $200 million.A final investment decision on the Driftwood LNG project is anticipated to be made by Tellurian in the first of 2019. The agreements are subject to relevant regulatory approvals.
About Driftwood LNG project
Owned by Tellurian, Driftwood LNG is a production and export terminal on the west bank of the Calcasieu River, south of Lake Charles, LA. Construction of the facility is underway. Post completion, the terminal will have a capacity to export about twenty-seven million, six hundred thousand tons of LNG per year to worldwide customers.
Zacks Rank & Key Picks
Currently, TOTAL carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are Antero Resources Corporation (NYSE:AR) , CrossAmerica Partners L.P. (NYSE:CAPL) and SEACOR Holdings, Inc (NYSE:CKH) . While Antero Resources and CrossAmerica Partners sport a Zacks Rank #1 (Strong Buy), SEACOR Holdings carries a Zacks Rank #2 (Buy). You can see Original post
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