"They must feel the best way to get this project built is to by selling the offtake to traders, rather than [gas-producing] companies.". Liquefied Natural Gas Members of Deep Value Returns get exclusive access to our model portfolio. Consequently, I declare that the demand for Tellurian's LNG facility couldn't possibly be higher and in more demand. 2023 Natural Gas Intelligence. Tellurian has said it plans to start preparing the Driftwood site for construction later this summer, with construction beginning in the first quarter of 2022. read more. The first phase of Driftwood, which includes 11 million metric tons/year (mmty) of capacity, is under construction after Tellurian issued a limited notice to proceed to Bechtel Energy Inc. last year. Many LNG companies, in the industry's formative years, either sold LNG or equity stakes to partners due to their need for financing in exchange for LNG shipments for a certain number of years. Not at less than $2 per share. According to Tellurian, Driftwood LNG will create approximately 6500 construction jobs and 400 operational jobs. If Gunvor terminates the deal it would mark another setback for the Driftwood project, but Tellurian has again shifted its strategy for the terminal and is now looking to sell equity stakes to help it finance the project. But investors crave FID details. High upside energy, commodity, tech, and dividend stocks. The U.S. Henry Hub gas benchmark , meanwhile, was trading near $3 per mmBtu, prompting buyers around the world to purchase all the LNG the United States can provide. Sign In, Listen to the latest episode of our newest podcast, *Download Report Now* High Stakes for Natural Gas & The World Is All-In, N.A. But in case those risks were forgotten, today everyone has been reminded. Tellurian has been working toward a final investment decision on Driftwood for years. Tellurian reported a full-year net loss of $49.8 million (minus 9 cents/share), compared to a net loss of $114.7 million (28 cents) in 2021. The definitive agreements are consistent with the terms contemplated by the Heads of Agreement announced on April 3, 2019, and are subject to certain closing conditions, including the final investment decision (FID) to construct Driftwood. The partners were to receive LNG from the project. In the past, Tellurian wanted partners like TotalEnergies to invest in its Driftwood project, which will include a liquefaction plant, pipelines and natural gas production. Driftwood is categorically not getting built by 2026. Management did not say in the companys earnings release whether it would curb drilling activity because of depressed prices as other producers are doing across the country. Tellurian also has its core business! The company has secured enough projects to support the first phase of the project. As per usual, Souki took to YT to argue his take. Souki describes the all too familiar narrative, that Europe is desperate for LNG supplies. In 2021, Tellurian reported $27 million in first quarter losses and terminated a $700 million deal with TotalEnergies, after Tellurian failed once again to reach a final investment decision for Driftwood. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. This is not a significant dilution and amounts to less than 4%. This is of course if Driftwood ends up getting built at all. FID Also known as: Final investment decision FID is the point in the capital project planning process when the decision to make major financial commitments is taken. ISSN 2158-8023 Earlier this month, when I wrote my bullish analysis of Tellurian, it nearly coincided with the fire at the Freeport liquified natural gas ("LNG") facility. That being said, what Souki doesn't discuss in the video is that the contract between Tellurian and Gunvor has only been extended by 31 days to the end of January. Dow and X-energy to build U.S. Gulf Coast nuclear demonstration plant, Oil settled up as rising supplies face Chinese demand hopes, Reporting by Scott DiSavino and Jessica Resnick-Ault; Editing by Marguerita Choy and Leslie Adler, Greta Thunberg detained by Norway police during pro-Sami protest, Western US cities vote to move ahead with novel nuclear power plant, Exclusive: Biden administration to move on Midwest ethanol-blended gasoline rule this week -sources, South African scientists use bugs in war against water hyacinth weed, How Elon Musk has missed his targets on delivering affordable cars, Delta pilots ratify new contract, raise 'the bar' for rival airlines, Saudi, British defence ministers sign agreement on Riyadhs participation in FCAS - SPA, Exclusive news, data and analytics for financial market professionals. It's not just an out-of-the-money option. Here's the thing that a lot of investors have likely forgotten about. I have no business relationship with any company whose stock is mentioned in this article. Recall, this is Tellurian's vision. It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. Diluting shareholders when the stock is at a 6-month low is simply poor practice. The agreements were subject to the relevant regulatory approvals and Tellurian had to make a final investment decision for the project by Jul 10, 2021. See here for a complete list of exchanges and delays. Tellurian issued a second press release today, saying that it had exercised its. "This activity has pushed a host of pre-final-investment-decision U.S. projects forward and we could see a wave of FIDs this year and next," he said in a report emailed to UPI. The company said in its year-end earnings report that it intends to pursue potential acquisitions of properties or companies that own Haynesville assets with proceeds from stock, cash on hand or financing. 1.800.427.5747 In a video posted yesterday, Tellurian's Charif Souki explained why Tellurian had not felt comfortable in committing the remaining 2 million tonnes of its 11 million tonnes per year facility. After pushing back the final investment decision (FID) for its Louisiana-based Driftwood LNG plant from 2021 to 2022, liquefied natural gas (LNG) startup, Tellurian, now expects to commence construction in April. A wealth of resources for individual investors is available at www.zacks.com. Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. . I wrote this article myself, and it expresses my own opinions. 3/1/2023. ConocoPhillips (COP): Free Stock Analysis Report, Hess Corporation (HES): Free Stock Analysis Report, Magellan Petroleum Corporation (TELL): Free Stock Analysis Report, TotalEnergies SE Sponsored ADR (TTE): Free Stock Analysis Report. This would severely limit Tellurian's upside. I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. A story that's going to be a win-win for all parties. "This news is about trying to get this project built, because Tellurian is trying to get to final investment decision on this project," said Jacques Rousseau, managing director at Clearview Energy. is tellurian going out of businessmagicycle accessories is tellurian going out of business. I wrote this article myself, and it expresses my own opinions. You have 3 free articles remaining. It then announced it would seek equity partners. Tellurian is being priced as an out-of-the-money option. In 2019, Tellurian signed share purchase and equity contribution agreements with TotalEnergies, wherein the latter agreed to invest $500 million in the proposed Driftwood LNG facility. Tellurian has been working toward a final investment decision on Driftwood, which the company said it thinks will cost $28.9 billion, for years. Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. In sum, there are three items overhanging Tellurian. I am not receiving compensation for it (other than from Seeking Alpha). That those contracts are not what the business model is about. I follow countless companies and select for you the most attractive investments. The industry leader for online information for tax, accounting and finance professionals. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Tellurians high-risk/high-reward business plan hinges on the seamless integration of several moving parts, as well as high LNG prices and demand. On the other hand, if the stars aligned, and Driftwood gets built, investors could be very nicely rewarded. Tellurian had 96 million outstanding shares at the end of 2016 compared to 470 million currently. Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. The bigger question is what LNG prices will be in 2026. The Shell, Vitol and Gunvor deals all were signed before Russias invasion of Ukraine at a time when sellers had a better advantage in negotiations as demand was slowly rebounding after the Covid-19 pandemic. This is a simple case of arbitrage. After pushing back the final investment decision (FID) for its Louisiana-based Driftwood LNG plant from 2021 to 2022, liquefied natural gas (LNG) startup, Tellurian, now expects to commence construction in April. Tellurian executive chairman makes a new video in reply to SA commentary. Please. Get them exclusively at Deep Value Returns. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. Tellurian Inc.'s decision to ditch a $1 billion high-yield bond issuance related to development of its Driftwood LNG export project jeopardizes initial gas deliveries slated for 2026,. $6 billion from equity. By using this Site or clicking on "OK", you consent to the use of cookies. All Rights Reserved. Driftwood LNG Plans Move Forward Despite Lack Of Financing. Type a symbol or company name. But common sense. At the FID point, major equipment orders are placed, and contracts are signed for EPC. The SPA is for the purchase of LNG free on board at a price based on the Platts Japan Korea Marker. This clearly is super advantageous to Cheniere (LNG). Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I have no business relationship with any company whose stock is mentioned in this article. July 12 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Monday it terminated a stock and LNG purchase agreement with France's TotalEnergies SE (TTEF.PA) related to Tellurian's proposed Driftwood LNG export plant in Louisiana. | 2023 ESG Review. Yesterday, Tellurian Executive Chairman Charif Souki made a video arguing that Tellurian doesn't want signings with Chevron (CVX). The concept is largely unproven in the U.S. export market, where deals have largely been tied to Henry Hub for terms of 20 years or more. Its stock has gained 80.3% compared with the industrys 10.8% growth. Looking for a portfolio of ideas like this one? I believe that anyone reading this knows the spiel well. I argue that this meaningfully improves the bull. Infrastructure This would put the stock priced at somewhere around 3x its 2026 cash flows. B.Riley analyst Liam Burke is positive on the stock. I am not receiving compensation for it (other than from Seeking Alpha). Next, Tellurian's share price is trading at a multi-year low. Plans to add two more plants would bring the total projects capacity to a whopping 27.6 MTPA for a total cost of US$30 billion. Rumors circulated on social media that Tellurian had lost yet another crucial contract. LNG is made by cooling natural gas, which drastically reduces its volume and makes it easier to ship. | Tellurian has a contract with Bechtel to build the liquefaction plant. ISSN 2577-9877 You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. I am not receiving compensation for it (other than from Seeking Alpha). Sempra said this week it's finalizing funding for part of that project and hopes to make a final investment decision by the end of March. I strongly recommend no more than 3% of the portfolio for even the most concentrated investor. Some call it the Internet of Money and predict it could change the way money works forever. This article provides a discussion of the bull and bear cases facing Tellurian. The Hartbeespoort dam in South Africa used to be brimming with people enjoying scenic landscapes and recreational water sports. Well, there's always hope. Presently, Tellurian's market cap is around $1 billion. 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