Bechtel Oil, Gas and Chemicals Inc has agreed to design and build Tellurian Inc.'s Driftwood LNG, a proposed liquefied natural gas facility near Lake Charles, for $15.2 billion.
Driftwood includes 20 liquefaction units, each expected to produce up to 1.38 million tons of LNG per year; three LNG storage tanks with 8.3 million cubic feet of storage; and three marine loading berths. The project will be built in four phases. The first phase will be build in four phases, and Bechtel has agreed to four fixed-price, lump-sump, turnkey arrangements.
Tellurian President and Chief Executive Officer Meg Gentle said the agreements with Bechtel guarantee the facility will be built at a cost of $550 per ton, making it one of the lowest-cost liquefaction construction projects in the world.
Lowering construction costs is a key piece of Tellurian's business strategy. In October, Tellurian announced it could deliver natural gas to Japan at $6 per thousand cubic feet thanks to a financing model that relies on buyers, like large utility companies, for financing. Tellurian will give buyers equity with agreements to buy 1 million tons of LNG for $1.5 billion, payable over four years.