Williams Companies has no plans to acquire Tellurian although it did consider a bid for the struggling LNG project developer.
The statement, as carried by Reuters, follows a report about Tellurian saying that the company was considering a sale as one of its options, as it struggles to keep its Driftwood LNG project viable after failing to secure funding from long-term buyers.
It is this lack of long-term buyers that made Williams decide to reconsider the option of buying Tellurian.
“There is the advantage of it being permitted, it does have a speed to market that is interesting to us, but it does not have the commercial contracts on the demand side,” executive VP of strategy Chad Zamarin told Reuters.
Williams would be more interested in projects that are already operating and plan to expand rather than newbuilds such as Driftwood, Zamarin also said.
The Driftwood LNG project, which is currently under construction, will have a capacity of 27.6 million tons of liquefied natural gas annually and will not be subject to the recent pause in LNG export capacity approvals enacted by the Biden administration. There is a potential to expand this to 60 million tons annually.
The project has a price tag of some $25 billion, of which Tellurian has already spent around $1 billion, with construction at around 30% of completion, according to a recent corporate presentation. Finding long-term buyers for the gas, however, has proved more challenging than perhaps expected, threatening the viability of the project.
Driftwood LNG will comprise five liquefaction trains, with the first phase of development to add 11 million tons of LNG annually to the U.S. total. Currently, LNG export facilities in the United States have a combined operating capacity under real-world operating conditions of 11.4 billion cubic feet daily, the EIA said in its Annual Energy Outlook 2023 last year.
