Baker Hughes Company (NASDAQ:BKR) has inked a significant agreement with Tellurian Inc. (NYSE:TELL) to provide refrigerant compression packages for the ambitious Driftwood Liquefied Natural Gas (LNG) project located in Louisiana.
Under the terms of the deal, Baker Hughes will deliver eight LM6000PF+ gas turbines, main refrigerant compressors, and control units for the initial phase of the Driftwood LNG initiative. The first phase of Driftwood, upon completion, will encompass two LNG facilities boasting a combined export capacity of 11 million tons annually. Baker Hughes’ cutting-edge technology is poised to facilitate the commencement of LNG production at Driftwood by 2027.
Once operational, Driftwood LNG is set to possess a formidable export capacity of up to 27.6 million tons of LNG per year, making it a prominent contender in the realm of low-cost LNG production projects on a global scale.
An interesting development in this partnership is Baker Hughes’ commitment to complete the fabrication of the electric-powered integrated compressor line (ICL) packages and other turbomachinery equipment for Driftwood Pipeline’s Line 200 by early 2024. This marks a significant milestone as it signifies the first instance of Baker Hughes installing its ICL decarbonization technology for pipeline compression in North America.
For the first phase of the Driftwood LNG terminal, Bechtel Energy has been entrusted with the role of engineering, procurement, and construction contractor. Bechtel has already accomplished the piling and compressor foundations for Plant 1 of the Driftwood LNG project.
Tellurian, the driving force behind this initiative, specializes in the development of low-cost LNG projects. The company operates natural gas liquefaction and storage facilities as well as loading terminals. Notably, the company envisions the development costs for the first phase of the Driftwood LNG export plant to reach a substantial $14.5 billion.
Baker Hughes is widely regarded as a leader in the LNG sector, and BKR anticipates sustained growth in LNG demand for several years to come. The company’s international project pipeline extends its visibility well into 2026 and beyond. Importantly, Baker Hughes’ reliable technology solutions are poised to play a pivotal role in supporting LNG production within the United States.
Looking at the performance metrics, Baker Hughes’ shares have demonstrated noteworthy outperformance in the last six months, with a 23.7% gain compared to the industry’s growth of 17.7%.
Featured Image: Freepik @ manine99
