Aethon closed a deal with Tellurian Inc. to grow its Haynesville Shale assets to about 375,000 total acres and its natural gas gathering and treatment capacity to more than 3 Bcf/d, Aethon said on July 1.

Tellurian announced the $260 million deal with Aethon in May. The move transforms Tellurian into a pure-play LNG firm. Tellurian company said the proceeds from the sale would be used to reduce debt on its Driftwood LNG development on the Calcasieu River in Louisiana.

Aethon Closes $260MM Deal for Tellurian’s Gas, Midstream Assets
(Source: Rextag data)

“This transaction is a significant step in securing our balance sheet and progressing Driftwood,” said Tellurian Executive Chairman Martin Houston in a press release.

As part of the deal, Aethon signed a heads of agreement (HOA) for 2 metric tons per year of LNG from the Driftwood project.

“As a private equity firm and operator, we are excited to enhance our strategic footprint by integrating Tellurian's upstream and midstream assets into our extensive Haynesville position,” said Gordon Huddleston, Aethon’s president and partner.