U.S. Markets closed

Total, Tellurian sign deals to develop Driftwood LNG project

SHANGHAI, April 3 (Reuters) - French oil and gas major Total SA and U.S. company Tellurian Inc have signed several deals to develop the Driftwood liquefied natural gas (LNG) project in Louisiana, they said on Wednesday.

They have signed a non-binding heads of agreement (HOA) where Total will invest in Driftwood Holdings and offtake 2.5 million tonnes per annum (mtpa) of LNG.

The HOA will include both companies entering into a binding sales and purchase agreement (SPA) to take 1.5 million tonnes per annum of LNG from Tellurian Marketing's LNG offtake volumes from the Driftwood project.

It will also include a $500 million equity investment by Total in Driftwood LNG and the purchase of an additional 1 mtpa of LNG from the proposed project.

The SPA is for the purchase of LNG on a free-on-board (FOB) basis for a minimum of 15 years, at a price based on Platts Japan Korea Marker (JKM).

Total will also buy about 20 million shares of Tellurian common stock for $200 million.

The agreements are subject to relevant regulatory approvals and to a final investment decision on the Driftwood LNG project, which is expected to be made by Tellurian in the first of this year. (Reporting by Meng Meng and David Stanway in SHANGHAI, writing by Jessica Jaganathan; editing by Richard Pullin)