Tellurian Inc. and Total S.A. announced that the two companies have signed a Heads of Agreement (HOA) for Total to make a $500 million equity investment in the integrated Driftwood project and to purchase one million tonnes per annum (1 mtpa) of liquefied natural gas (LNG) from Driftwood.

In addition, the HOA specifies that Tellurian and Total will enter into a sales and purchase agreement (SPA) for a further 1.5 mtpa of LNG from Tellurian Marketing’s LNG offtake volumes from the proposed Driftwood LNG export terminal. The SPA will be for the purchase of LNG free on board (FOB) for a minimum term of 15 years, at a price based on the Platts Japan Korea Marker (JKM).

Tellurian and Total have also executed a common stock purchase agreement pursuant to which Total will purchase approximately 19.87 million shares of Tellurian common stock for $200 million, subject to certain closing conditions in particular the Driftwood project FID. Including Total’s original $207 million investment in Tellurian in 2017, Total’s aggregate investment within the Tellurian portfolio will amount to $907 million.

The common stock purchase agreement specifies that Tellurian Marketing will purchase equity interests in Driftwood, which Tellurian intends to fund with a private equity financing at the Tellurian Marketing level. Tellurian anticipates that the equity interest will represent 2 mtpa of LNG purchases and that after full construction of the ~27.6 mtpa Driftwood LNG terminal, Tellurian Marketing will receive ~13.6 mtpa of LNG from Driftwood.

President and CEO Meg Gentle said, “Total is a premier global natural gas production and trading company and will manage a portfolio of 40 mtpa of LNG by 2020. Our partnership with Total began before the inception of Tellurian, when Total endorsed a new business model for U.S. LNG. We look forward to consistently delivering on our development plan for Driftwood LNG and the integrated network, beginning construction on the largest privately funded infrastructure project in the U.S., and producing low-cost, reliable natural gas as we dedicate LNG to reduce urban pollution and transition to a low-carbon economy.”

Patrick Pouyanné, Total’s Chairman and CEO said, “The cost to produce natural gas in the U.S. continues to fall, as the engine of American innovation finds more efficient ways to apply technology to producing its vast energy resources. The Tellurian team has an established track record of developing and constructing energy infrastructure on time and at the lowest cost. We look forward to joining the Driftwood partnership and continuing to invest in our LNG portfolio to provide flexible, reliable, and low-cost LNG to our global customers.”

The Driftwood project includes natural gas production, gathering, processing and transportation facilities, along with Driftwood LNG, a proposed ~27.6 mtpa liquefaction export facility that will be located near Lake Charles, Louisiana on the U.S. Gulf Coast. Driftwood LNG and Driftwood Pipeline have received the final Environmental Impact Statement (EIS) and are expected to begin construction this year, deliver first LNG in 2023 with full operations in 2026.

About Tellurian Inc.

Tellurian (Tellurian) (NASDAQ: TELL) was founded by Charif Souki and Martin Houston and is led by President and CEO Meg Gentle. Tellurian intends to create value for shareholders by building a low-cost, global natural gas business, profitably deliverin natural gas to customers worldwide. Tellurian is developing a portfolio of natural gas production, LNG trading, and infrastructure that includes an ~27.6 mtpa LNG export facility and an associated pipeline. Tellurian is based in Houston, Texas, and its common stock is listed on the Nasdaq Capital Market under the symbol “TELL.”

About Total

Total is a major energy player, which produces and markets fuels, natural gas and low-carbon electricity. Our 100,000 employees are committed to better energy that is safer, more affordable, cleaner and accessible to as many people as possible. Active in more than 130 countries, our ambition is to become the responsible energy major.