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Souki's Driftwood LNG files application with FERC

The Driftwood LNG LLC project being developed by Cheniere Energy Inc. founder Charif Souki's Tellurian Inc. has filed a formal application with FERC for the proposed 26 million-tonne-per-annum Louisiana gas liquefaction and export terminal.

"In recent years, the U.S. has experienced significant advances in natural gas drilling and production technologies, which have enabled broader access to U.S. natural gas reserves," Driftwood LNG said in its application. "This increase in natural gas production has created a market with sufficient natural gas inventories to sustainably accommodate both domestic need and international export demand in the form of LNG."

The March 31 application from Driftwood LNG and Driftwood Pipeline LLC sought FERC authorization under Sections 3 and 7 of the Natural Gas Act for the terminal and for the associated 96-mile pipeline that will deliver gas to the export facility at an annual average of 4 Bcf/d.

The project has been in FERC's prefiling review process since June 2016. The terminal is expected to include 20 liquefaction trains, each capable of producing 1.3 mtpa. The terminal would be located on the west side of the Calcasieu River in Louisiana, with construction expected to begin in mid-2018. (FERC docket PF16-6)

Tellurian was cofounded by Souki and former BG Group plc COO and Executive Director Martin Houston after Souki was ousted from his role at Cheniere by billionaire activist investor Carl Icahn. The company recently formed a marketing team to court buyers for Driftwood's liquefaction capacity. CEO Meg Gentle has said the company aims to include a mix of long-, medium- and short-term contracts as buyers increasingly call for more flexibility.

Tellurian announced Dec. 20, 2016, that Total SA was buying a 23% stake in the company for $207 million, giving the small developer a boost as it taps capital markets for financing. While Total is solely an equity partner for now, Gentle did not rule out the possibility that the oil and gas giant could become an off-taker.