Woodside Snaps Up Tellurian in LNG Expansion Push

Australia’s Woodside Energy has struck a deal to acquire Tellurian for $1.2 billion as it seeks to turn into a “global LNG powerhouse”.

The deal “adds a scalable US LNG development opportunity to our existing approximately 10 Mtpa of equity LNG in Australia,” Woodside chief executive Meg O’Neill said. “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.”

Tellurian has been planning to build Driftwood LNG, a production and export terminal on the Calcasieu River south of Lake Charles, Louisiana for years. Once complete, the terminal would be capable of exporting up to 27.6 million tons of liquefied natural gas annually.  

After failing to secure agreements and funding for the plant, Tellurian said late last year that liquidity issues "raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued."

The company got a delay to its death sentence earlier this month when the Federal Energy Regulatory Agency approved a three-year extension of the deadline for the construction of the facility.

The Woodside deal could be interpreted as the last move that Tellurian had to ensure its continued existence in the face of its multiple challenges.

“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,” Tellurian’s executive chairman, Martin Houston, said in a press release.

The value of the deal, Tellurian said, represented a 75% premium to the company’s closing price on July 19 and a 48% premium to its 30-day volume-weighted average price.

The acquisition for Woodside, follows a failed attempt to take over domestic peer Santos earlier this year.

By Irina Slav for Oilprice.com

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