HOUSTON—The main issue confronting Tellurian Inc. at the moment is finding partners and not off-takers for gas to eventually flow from the company’s Driftwood LNG project, Executive Chairman Charif Souki told Hart Energy during CERAWeek by S&P Global.

“Off-takers are not very important because we are selling gas on the global gas market [with] global gas prices. We can replace those off-takers any time we want—it is not a problem,” Souki said on the sidelines of the annual event. “The issue is the partners. This is the key thing.”

Tellurian has already invested $1 billion in Driftwood LNG, and the executive believes it can finance about $7 billion-$8 billion with traditional financial institutions. The company is still seeking between $2 billion-$3.2 billion from partners. 

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“That’s what really matters,” Souki said, referring to the equity to come from future partners. 

“Clearly, the market is getting a lot better for us because all the major companies around the world are making money hand over fist,” Souki said. “So, if you’d asked me 18 months ago, I would have said it makes sense, however, who’s got money? Now, we know who has money.”

Driftwood LNG is a potential component in the U.S. effort to boost LNG exports to world markets still feeling the negative impacts of reduced energy flows from Russia following that country’s invasion of Ukraine.

Driftwood LNG Phase I is a two-plant development to provide 11 million tonnes per annum (mtpa) by early 2026. Phase II is a three-plant development that would provide an additional 16.6 mtpa.

Tellurian still hopes to get Phase 1 online by late-2026 or early-2027. The company continues to move forward with construction activities and looks to finance Phase II with cash flow from Phase 1.

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“Bechtel is still working hard on the site and has a few hundred people on the site, but would like to have a few thousand,” Souki said, adding funding from partners would allow that to happen.

Steady production this year and next

Souki expects U.S. gas prices to remain weak over the near-term, but is optimistic prices will rebound do to the cyclical nature of the industry. 

“We’ve had two very good years,” Souki said. “We took advantage to build our production, and what we are not going to stop is [increasing] our footprint. So, we continue to acquire acreage and a position with the knowledge that in four or five years we’ll be selling gas on the global markets.”

Tellurian will keep production stable in the 225 MMcf/d range until domestic prices rebound over the next year-and-a-half to two years, he said.