SHANGHAI—French oil and gas major Total SA and Tellurian Inc .have signed deals supporting the development of the proposed $30 billion Driftwood LNG project, the two firms said on April 3.

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

The announcement was made during the LNG 2019 conference in Shanghai.

The HOA is for Total to make a $500 million equity investment in the integrated Driftwood project in Louisiana and to buy one mtpa of LNG from Driftwood.

In addition, the HOA specifies that both companies will enter into a binding sales and purchase agreement (SPA) for a further 1.5 mtpa of LNG from Tellurian Marketing's LNG offtake volumes from the proposed Driftwood terminal.

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).

Both companies also signed a common stock purchase agreement in which Total will buy nearly 20 million shares of Tellurian common stock for $200 million.

Including Total's original $207 million investment in Tellurian in 2017, Total's aggregate investment in the Tellurian portfolio will amount to $907 million, Tellurian said in a press release.

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 half of this year.

"With this deal, we will have 10 million tonnes exposure in North America," said Total's chief executive Patrick Pouyanne on the sidelines of the LNG2019 conference in Shanghai.

It will also be the French major's first deal priced off JKM, which is a fast developing Asian benchmark for spot cargoes.

"JKM makes sense for our global portfolio," Pouyanne said.

Tellurian plans to make a final investment decision on its Driftwood LNG export project in the first half of 2019 for phase 1.

The project is expected to produce first LNG in 2023, with full operations expected in 2026.

In total, Driftwood will produce 27.6 mtpa of LNG or about 4 billion cubic feet per day (Bcf/d) of natural gas.

The FID for the second phase of the project is expected about 12 to 18 months after construction starts on phase 1, said Meg Gentle, chief executive of Tellurian.