Woodside Energy Group Ltd has announced a definitive agreement to acquire Tellurian Inc. and its Driftwood LNG development project in an all-cash transaction valued at approximately $900 million.
The deal, which represents $1.00 per share of Tellurian’s outstanding common stock, has an implied enterprise value of about $1.2 billion.
Woodside CEO Meg O’Neill stated that the acquisition positions the company to become “a global LNG powerhouse”.
The deal adds a scalable U.S. LNG development opportunity to Woodside’s existing portfolio of approximately 10 million tonnes per annum (Mtpa) of equity LNG in Australia.
The Driftwood LNG project, located near Lake Charles, Louisiana, is fully permitted and in an advanced stage of pre-final investment decision (FID) development.
It has a total permitted capacity of 27.6 Mtpa, with plans for five LNG trains across four phases.
Key strategic benefits of the acquisition for Woodside include:
- Expanding its position as a leading independent LNG company
- Adding a high-quality, fully permitted U.S. LNG development to its portfolio
- Leveraging Woodside’s LNG expertise to unlock development value
- Enabling marketing optimisation through geographic diversification
- Increasing long-term cash flow generation potential
- Supporting Woodside’s carbon competitiveness goals
Woodside is targeting FID readiness for Phase 1 of Driftwood LNG (11 Mtpa) from the first quarter of 2025.
The company expects development costs of approximately $900-960 per tonne for Phases 1 and 2.
The transaction is expected to close in the fourth quarter of 2024, subject to customary conditions including Tellurian shareholder approval and regulatory approvals.
Woodside will provide a loan of up to $230 million to Tellurian to maintain momentum on-site activities and de-risking efforts prior to the deal’s completion.
This acquisition aligns with Woodside’s strategy to thrive through the energy transition, as the company believes LNG will play a key role in meeting global energy needs while delivering value to shareholders.