Driftwood LNG developer Tellurian to drill 13 wells in 2022, upstream chief says

Tellurian plans to drill 13 wells in the Haynesville shale next year that it will operate, as it looks to build sufficient feedgas supplies to support the first phase of its proposed Driftwood LNG export terminal in Louisiana, head of production John Howie said Sept. 14.

Based on wells that it is drilling and operating and wells that it participates in with other operators, Tellurian expects to have about 100 MMcf/d of output by the end of 2021, three times the volume it was producing at the end of 2020. That's still far short of the 1.5 Bcf/d it needs for the liquefaction facility.

To get the rest of the way, Tellurian continues to consider acquisitions, Howie said during a podcast posted on the company's website.

"We're continuously in the market for companies to acquire, looking for acreage to lease and looking for people to partner with," said Howie, executive vice president of upstream at Tellurian and president of Tellurian Production Co.

No specifics about acquisition targets were provided.

With sufficient offtake agreements in place to support the first phase of the up to 27.6 million mt/year liquefaction project, Tellurian still must obtain financing for construction of the terminal. One component of those discussions is Tellurian securing enough drilling reserves to support its plan to produce the gas to feed the facility.

Following 10-year agreements with Gunvor, Vitol and Shell, total offtake commitments to Driftwood LNG now stand at 9 million mt/year, enough, Tellurian says, for the two-plant first phase of the project. Each plant is expected to have up to four liquefaction trains.

Tellurian has said it is targeting to give contractor Bechtel a notice to proceed with full construction of the LNG terminal by the end of next year's first quarter.