Woodside Energy Acquires Tellurian for $1.2 Billion, Strengthening LNG Export

Woodside Energy announced on Monday that it has agreed to acquire U.S. liquefied natural gas developer Tellurian. The $1.2 billion deal includes debt and encompasses Tellurian’s Gulf Coast Driftwood LNG export project.

The acquisition is set to fortify the United States’ status as the world’s leading producer of liquefied natural gas (LNG). The Driftwood LNG facility, located in Lake Charles, Louisiana, boasts a substantial capacity of 27.6 million metric tons per annum. Completion of this project is critical for maintaining and expanding the U.S.’s export capabilities in the superchilled gas market.

Woodside’s purchase includes a $900 million cash transaction for outstanding Tellurian common stock, priced at $1 per share. This price represents a premium of more than 75% over Tellurian’s last closing price, highlighting the strategic importance of the acquisition.

According to Reuters, this deal provides Woodside with a fully authorized project in the United States, offering a valuable advantage amid the Biden administration’s current pause on approvals for new LNG exports to non-free trade agreement countries. This pause has posed challenges for other LNG developers in advancing their projects.

“Positioning Woodside to be a global LNG powerhouse,” said CEO Meg O’Neill, emphasizing the strategic importance of the acquisition. The addition of the Driftwood LNG project complements Woodside’s existing portfolio, which includes 10 million metric tons per year of equity LNG production in Australia.

The acquisition also offers a lifeline to Tellurian, which has faced financial difficulties and has been seeking partners to fund the Driftwood project. In May, Tellurian announced plans to sell its upstream assets to alleviate some of its debt burden.

Source: Reuters