Tellurian Says Driftwood LNG Deals with Shell, Vitol Scrapped
(Reuters) — Tellurian Inc. lost two of its biggest potential customers after the U.S. LNG developer disclosed scrapped LNG supply deals with Shell Plc and Vitol SA on Friday.
Tellurian's shares, halted multiple times after the disclosure on Friday, were last down about 20%.
The company announced the canceled deals a few days after withdrawing a $1 billion high-yield bond sale that would have funded the initial construction of its proposed multibillion-dollar Driftwood LNG plants in Louisiana.
Houston-based Tellurian said Shell had delivered it a notice to cancel its agreement to purchase LNG from Tellurian's two Driftwood LNG export plants.
Tellurian also said it sent a termination notice to global energy trader Vitol related to their separate Driftwood LNG agreement.
Tellurian would have sold 3 million tonnes per annum (MTPA) of LNG each to Shell and Vitol for 10 years from its 27.6-MTPA Driftwood plants as part of the separate deals signed in 2021.
"For Driftwood, (the scrapped bond offering) puts in jeopardy the financial ability to deliver gas on the schedule that we were hoping to stick to," Charif Souki, Tellurian's executive chairman and natural gas veteran, said in a YouTube video on Tuesday.
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