Sep 23, 2022
Frontline leaders in Louisiana and environmental advocates cautiously celebrated Friday after gas developer Tellurian revealed that major deals with Shell and Vitol have fallen apart, a big blow to an export terminal project.
"Our priorities are backwards; we should be putting people first, not big polluters."
"While the fight is not over, this is hopeful news," declared Roishetta Ozane, founder of the Vessel Project and Southwest Louisiana organizing director with Healthy Gulf.
Ozane and other campaigners hope the canceled contracts are a step toward stopping the development of the Driftwood liquefied natural gas (LNG) production and export terminal on the west bank of the Calcasieu River.
Tellurian said in a Friday filing with the Securities and Exchange Commission (SEC) that it "received a notice of termination from Shell" regarding a pair of sale and purchase agreements and also "delivered a notice of termination to Vitol" for another 2021 deal.
In other words, the LNG developer has "lost two of its biggest potential customers," and, as a result, "Tellurian's shares, halted multiple times after the disclosure on Friday, were last down about 20%," Reutersreports. "The company announced the canceled deals a few days after withdrawing a $1 billion high-yield bond sale that would have funded the initial construction."
Tellurian noted in a statement Friday that it "has updated its Driftwood LNG financing strategy to prioritize securing equity partners." Highlighting sales last quarter and future expectations, president and CEO Octavio Simoes said the company has "made good progress on our construction plan" for the new terminal "and will continue funding that with our cash and operating cash flow."
\u201cTellurian, the developer of a massive US LNG export project, said Shell terminated a deal to buy fuel from its proposed plant \ud83c\uddfa\ud83c\uddf8 \ud83d\udea8\n\n\u26a0\ufe0f Tellurian ended a similar deal with Vitol\n\ud83d\udcc9 Tellurian\u2019s stock drops as much as 44%\n\ud83d\udcb0 The company has struggled to raise funds for its plant\u201d— Stephen Stapczynski (@Stephen Stapczynski) 1663947704
Meanwhile, activists urged action from elected officials and investors alike to kill the project.
"It has been clear from the beginning that Tellurian's Driftwood project is a bad investment," said Sierra Club's Adele Shraiman, asserting that the company "has led investors on a roller coaster of reckless gambles and abrupt changes for years, burning through hundreds of millions in investor cash and yielding abysmal results."
"Their newest offering promised massive risk and very little stability for investors, so it's not surprising that investors have backed away from this deal," she added. "Driftwood LNG also faces several legal challenges and community opposition, so its financial future is tenuous at best. Banks and investors would be wise to reconsider support for other reckless LNG expansion projects."
Ozane similarly argued that "from tax breaks to pollution and now to these recent financial downswings, we have all the evidence we need to understand that Driftwood will be a parasite on Southwest Louisiana. It's time that our public officials and the banks that support this awful project finally pull the plug on Driftwood."
Noting that some local residents of the already heavily industrialized area are still dealing with the destruction of hurricanes from the past few years, the campaigner said that "our priorities are backwards; we should be putting people first, not big polluters."
\u201cWhat a foolish road to continue down, especially when economically viable alternatives are available. Wonder how much taxes the root cause producers of climate change will be exempt from, and try to fund this on the backs of the people?!\n\n#NoNewFossilFuelProjects\n#EnoughIsEnough\u201d— james hiatt (@james hiatt) 1663943826
James Hiatt of the Louisiana Bucket Brigade also called for focusing on the needs of locals rather than pouring money into "destructive and dangerous" projects in communities "still recovering from record-breaking natural disasters caused by our collective dependence on fossil fuels."
"Our food and electricity bills soar while gas companies make record profits," Hiatt said. "Damaging our coasts and livelihoods for the profits of the few is a fool's errand."
Southwest Louisiana resident Natalie McLendon agreed and expressed relief that the Driftwood development may not happen.
"We don't need more LNG export terminals," she said. "I just want people to be able to enjoy the land and water without the blight of industry, and all the pollution they impose on our communities."
Speculation over the terminal's future comes as scientists continue to stress that for the sake of ensuring a habitable planet, human health, biodiversity, and the global economy, the world must swiftly transition away from fossil fuels.
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