(Reuters) - Tellurian Inc plans to make a final investment decision on its proposed $30 billion Driftwood liquefied natural gas (LNG) export project in Louisiana in the first half of 2019, the chief executive of the development company said on Tuesday.
“We will likely move forward with the first phase of the project with about half a dozen customer/partners,” CEO Meg Gentle told Reuters at the BloombergNEF Summit in New York, which should allow the company to produce the first LNG in 2023 and complete the project in 2026.
In total, Driftwood will produce 27.6 million tonnes per annum (MTPA) of LNG or about 4 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day. The first phase will likely comprise 16.6 MTPA, Gentle said.
Driftwood is one of a dozen U.S. LNG export terminals under development that expect to make a final investment decision in 2019, which together would produce about 146 MTPA of LNG.
Current U.S. LNG export capacity is around 39 MTPA, and new terminals under construction would produce an additional 44 MTPA.
“I don’t think all of the development projects will go forward,” Gentle said, noting Driftwood customer/partners would get the “lowest cost LNG leaving the United States.”
She said the country needs about 100 MTPA of new export projects to meet growing use of the fuel, noting recent low LNG prices in Europe and Asia over the past few months would help boost future demand.
In China, the world’s fastest growing LNG consumer, U.S. developers have said the trade war between Washington and Beijing has slowed customers from signing long-term deals.
“I’ve seen some momentum in the last 30 to 60 days, which may be a sign the two governments are nearing an amicable conclusion,” Gentle said, noting whenever the dispute is over “(Tellurian) and Chinese buyers stand ready to do transactions.”
Unlike most proposed U.S. LNG export projects that will liquefy gas for a fee, Tellurian is offering customers the opportunity to meet their gas needs by investing in a full range of services from production to pipelines and liquefaction.
Current partners include units of Total SA, Vitol, Petronet LNG Ltd, General Electric Co and Bechtel, which has a $15.2 billion contract to build the liquefaction facility. Pipelines, reserves and other expenses make up the rest of the project’s cost.
Reporting by Scott DiSavino; Editing by Chris Reese