Letter from Chairman Martin Houston on 29th January 2024
Dear shareholders of Tellurian,
It is a month since I sent you my first letter as Chairman and I wanted to give you an update, but also to thank the many shareholders who have written to me.
Late last month we appointed Lazard as our financial advisor. As I said in my letter on 28th December, the focus of the Lazard engagement is on commercial maters. While it is our policy not to comment in the media on M&A maters, we are aware of a misleading headline in a press report last week regarding our financial advisor. Let me clarify: first and foremost, the purpose of hiring Lazard was to give us advice on unlocking the value of our asset base and to help expand our thinking. For customers and potential equity investors, we want to widen the commercial aperture. We believe Driftwood LNG is a powerful platform:given our timeline, EPC contract, existing sitework, and fully permitted status that has high value in a growing LNG market.
We also wanted to access the considerable skills and experience of George Bilicic, the Global Head of
Lazard’s efforts in energy, and a member of Lazard’s Global Executive Committee, who will be leading
their Tellurian engagement. 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.
Our commercial activities are moving well and at pace. These include SPA discussions, equity discussions and now, some new approaches. I am pleased with progress and whilst I will not be drawn on dates or outcomes, I would say that we have clear internal timelines and anticipate some near-term decision points. That said, we will not create any false dawns. If we have concrete news, we will tell you, and if we are making progress, we will guide you.
We continue to work with Bechtel on the site at Driftwood under the LNTP2 (limited notice to proceed)
program and explore options for additional scope depending on the progress on the commercialization
front. We are balancing our spend across Driftwood, the upstream company and G&A. As I have
previously mentioned, we have made significant cuts to the later, without impeding any activities.
We are frequently asked about our licenses and permits for the construction and operation of Driftwood LNG. As many of you are aware, the Biden administration and the Department of Energy (DOE) announced last Friday, that the DOE will temporarily pause review and approval of all new and pending applications for export authorization to Non-Free Trade Agreement (Non-FTA) countries while DOE updates its assessment process.
Again, let me clarify an important point. 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.
We will continue to monitor the DOE’s assessment process review and any impacts it may have to our
Non-FTA export license. I would add that in the meantime, the global demand outlook for LNG has not
changed, so any scarcity will drive opportunity for Tellurian.
I am as motivated as all of you to realize value for Tellurian’s stakeholders and am committed to do the
related work needed to realize such value. I am a large Tellurian shareholder and have no greater purpose than getting this job done. I’ve been struck by the stories you have told in your e-mails to me, and I can only tell you that the Tellurian teams and the Tellurian Board are laser focused on delivering this value.
Many of you have waited a long time, we will do our very best to repay your trust and patience.
Onwards, Martin Houston, Chairman Tellurian, Inc
