Woodside Unlikely To Face Rival Bid in Deal for U.S. LNG Firm Tellurian

Australia’s Woodside Energy is unlikely to have to contend with a rival bid for U.S. LNG firm Tellurian, sources close to the proposed deal told Reuters on Friday.

Last month, Woodside Energy announced an agreement to buy Tellurian for $1.2 billion as it seeks to turn into a “global LNG powerhouse”.  

Woodside has entered into a definitive agreement to acquire all issued and outstanding common stock of Tellurian, including its owned and operated U.S. Gulf Coast Driftwood LNG development opportunity.  

Tellurian has been planning to build Driftwood, a production and export terminal on the Calcasieu River south of Lake Charles, Louisiana, for years. Driftwood LNG is a fully-permitted project, but it has faced setbacks and delays in recent years.    

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.”

Now the deal to buy Tellurian would give Woodside an attractive entry into a scalable, fully permitted 27.6 million tonnes per annum (Mtpa) U.S. LNG development option, the Australian firm said in July.

“The acquisition of Tellurian and its Driftwood LNG development opportunity positions Woodside to be a global LNG powerhouse,” said Woodside CEO Meg O’Neill.

The transaction is targeting completion in the fourth quarter of the 2024 calendar year.

Tellurian has not scheduled yet a date for a shareholder vote on the deal, a spokesperson for the company told Reuters.  

Tellurian’s board has approved the proposed transaction and its executive chairman Martin Houston has written in a letter to shareholders that it would be recommending that they approve the deal as “the offer fully reflects the company’s recent progress.”

Tellurian’s board has agreed to not solicit other offers, and to pay a $36-million termination fee in case a higher bid upends the current offer.

Chatterjee Management Company, the second-biggest shareholder of Tellurian, doesn’t like the price, but it is expected to endorse Woodside’s offer if a better one doesn’t emerge.

By Charles Kennedy for Oilprice.com

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