Woodside unlikely to face rival bid in deal for US LNG company Tellurian

Australia’s Woodside Energy is unlikely to face a rival bid for US LNG company Tellurian, sources close to the proposed deal told Reuters on Friday.

Last month, Woodside Energy announced a deal to buy Tellurian for $1.2 billion as it seeks to transform itself into a “global LNG powerhouse.”

Woodside has entered into a definitive agreement to acquire all of Tellurian’s issued and outstanding common stock, including the LNG development opportunity owned and operated by US Gulf Coast Driftwood.

Tellurian has been planning for years to build Driftwood, a production and export terminal on the Calcasieu River south of Lake Charles, Louisiana. Driftwood LNG is a fully permitted project, but has faced setbacks and delays in recent years.

After failing to secure agreements and financing for the plant, Tellurian said late last year that liquidity problems “raise substantial doubt about the Company’s ability to continue as a going concern one year after the date of the financial statements.”

Now, the deal to buy Tellurian would give Woodside an attractive entry into a scalable, fully permitted 27.6 million tonnes per annum (Mtpa) US LNG development option, the Australian firm said in July.

“The acquisition of Tellurian and its Driftwood LNG development opportunity positions Woodside as a global LNG powerhouse,” said Woodside CEO Meg O’Neill.

The transaction is targeted for completion in the fourth quarter of calendar year 2024.

Tellurian has not yet scheduled a shareholder vote on the deal, a company spokesman told Reuters.

Tellurian’s board of directors approved the proposed transaction, and its executive chairman, Martin Houston, wrote in a letter to shareholders that he would recommend they approve the deal because “the offer fully reflects the company’s recent progress.”

Tellurian’s board agreed not to solicit further bids and to pay a $36 million termination fee if a higher bid overturns the current offer.

Chatterjee Management Company, Tellurian’s second-largest shareholder, doesn’t like the price but is expected to approve Woodside’s offer unless a better one comes along.

By Charles Kennedy for Oilprice.com

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