Former Sempra Energy chief behind efforts to salvage Driftwood LNG project
(Reuters) - U.S. LNG developer Tellurian chose a Lazard Inc. investment banker to right its struggling Driftwood LNG export project, the company's chairman told investors this week.
Tellurian has been trying without success to get a 27.6 MMtpy LNG plant in Lake Charles, Louisiana, financed for years. Late last year, it sought Lazard's help with balance sheet management and commercial structures after warning in November it may not have enough resources to satisfy debt covenants without new cash.
Chairman Martin Houston wrote that he chose Lazard because of Managing Director George Bilicic's past as a senior executive at Sempra Energy, an operator of power and gas utilities and LNG plants.
"He is an experienced advisor to energy companies of all types and has specialized knowledge in the LNG industry from his role as President at Sempra Energy," Houston wrote.
Lazard was primarily hired to "give us advice on unlocking the value of our asset base and to help expand our thinking," the letter said. Discussions on sales and purchase agreements (SPAs) and equity are progressing, Houston wrote.
Among Bilicic's achievements at San Diego-based Sempra were the divestment of its Chile and Peru businesses, according to his LinkedIn.
Driftwood LNG's prospects could get a boost from the Biden administration's decision to pause reviews of LNG non-Free Trade Agreement export permit applications, Houston said.
"We already have our license to export LNG to Non-FTA Countries which is valid through 2050. As we get closer to completing construction, we plan to adjust the in-service date condition under that license to accommodate our construction timeline," Houston said.
Construction firm Bechtel Corp continues to work on the Driftwood site under a limited notice to proceed, Houston said.
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