Tellurian to sell land for $1 B and lease back for Driftwood LNG project
(Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc has entered into an agreement with an institutional investor to sell 800 acres of land in Louisiana for $1 B, a regulatory filing by the company showed on Thursday.
Tellurian agreed to sell the land earmarked for its proposed Driftwood liquefied natural gas terminal facility, and then lease it back for 40 years at a capitalization rate of 8.75% and a letter of credit equal to 12 months of rent, among other requirements.
Shares of Tellurian were up about 5% at $1.24 in early trading.
The Driftwood project has seen many setbacks including the cancellation of some LNG supply deals after two major potential customers last year raised concerns around its ability to finish the project.
The project, which received regulatory approvals in January to begin construction, is expected to produce 27.6 million tons per annum of LNG when ready.
The land sale and leaseback agreement is contingent on several factors including Driftwood LNG LLC, Tellurian's subsidiary, securing financing commitments for Phase 1 of the LNG project on terms satisfactory to the buyer.
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