Plus regular stock updates. There simply were no takers. I follow countless companies and select for you the most attractive investments. Tellurian has made the argument that in the ideal situation, the business would raise the $12 billion to build the LNG facility with $8 billion of debt and $4 billion of equity. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Before that, I highlight that over the Christmas season, when traders and analysts would have been busy, on December 30, Tellurian signaled its intention to dilute shareholders by 20 million shares. Tellurian Inc. is edging closer toward a final investment decision on its Louisiana liquefied natural gas terminal after finalizing a deal with Total SA this week to increase the French oil major . Looking for a portfolio of ideas like this one? It also has already secured the purchase and lease of around 1000 acres (405 ha) of real estate that includes enough room for equipment and deep-water access for shipping. Deep Value Returns' Marketplace continues to rapidly grow. Not signings. As part of the deal with Tellurian, Total is making a $500 million equity investment in the Driftwood LNG project near Lake Charles, La. Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. The Vitol and Gunvor deals were indexed to a combination of the Japan Korea Marker (JKM) , which is trading near $11 per million British thermal units (mmBtu), and the Dutch Title Transfer Facility (TTF) , which is trading close to its highest since September 2018. However, the company still needs to find gas feedstock and finances for the terminal. The industry leader for online information for tax, accounting and finance professionals. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. info@naturalgasintel.com Tellurian then secured a third SPA with Shell in July 2021. 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. But investors crave FID details. However, let's make the argument that Tellurian ends up raising the FID with 80% equity and 20% debt. Plus regular stock updates. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. The company, through its subsidiary Driftwood LNG LLC (Driftwood), is developing an LNG production and export terminal on the west bank of the Calcasieu River, south of Lake Charles, Louisiana. Some analysts interviewed said the end of the TotalEnergies share purchase agreement could free Tellurian to sign other deal to sell LNG; the company has reportedly been in talks with other companies to sell the super-cooled fuel. And not only robust, but stable, and predictable! Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. I have no business relationship with any company whose stock is mentioned in this article. | | I am not receiving compensation for it (other than from Seeking Alpha). In sum, there are three items overhanging Tellurian. Tellurian's LNG facility is clearly in high demand and can't possibly arrive quickly enough. This would severely limit Tellurian's upside. Get them exclusively at Deep Value Returns. Gunvor Group Ltd. has the option to terminate its deal to buy supplies from the proposed Driftwood LNG terminal after a deadline passed Tuesday for Tellurian Inc. to meet certain conditions. As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. All rights reserved. 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,. DEEP VALUE RETURNS: The only Marketplace with real performance. Tellurian is developing a portfolio of natural gas production, LNG trading, and infrastructure that includes an ~27.6 mtpa LNG export facility and an associated pipeline. Get access to 100,000+ more news articles & industry data. I provide a hand-holding service. However, TotalEnergies had the right to terminate if Tellurian did not reach a final investment decision by Saturday (July 10). Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. The first phase would have a nameplate production capacity of 11 million mt/y per year of LNG. Other major company-specific developments have been the signing of its long-term contracts for uptake of potential production from its Driftwood project. Yet another problem. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. It's not just an out-of-the-money option. Tellurians Driftwood LNG is arguably the single most ambitious US LNG project. 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. Tellurian, email You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. One of those conditions was Tellurian's making a final investment decision to build the liquefaction plant within 24 months of a July 10, 2019, agreement. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. Driftwood is categorically not getting built by 2026. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. 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. Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. (Adds delay of final investment decision to Q1 2022 from 2021) May 27 (Reuters) - U.S . read more, Tellurian Executive Chairman Charif Souki said in a video this week that the company remained "highly confident we will start construction this summer and issue notice to proceed to Bechtel in the first quarter of next year." Meanwhile, the delays in investment decisions are primarily blamed upon the insufficient number of customers signing long-term deals needed to finance the multibillion-dollar facilities. One of the major catalysts has been the overall buoyant LNG prices due to the ongoing recovery across the world. I am not receiving compensation for it (other than from Seeking Alpha). Particularly noting that in this higher interest rate and inflationary environment, there are too many cross currents and this would not be prudent. Copyright 2023 Market Realist. No gimmicks. Smith believes the market has finally reached an inflection point that would allow Freeport to reach a final investment decision (FID) on the fourth train in early 2023. . Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. All quotes delayed a minimum of 15 minutes. This is not a hindsight remark. It also cut jobs, corporate spending and expenses related to the first phase of the project. Tellurian is in a strong financial position with substantial liquidity after taking on expense reduction activities and significant debt reduction measures in 2020, and subsequent prepayments in 2021, CEO Octvio Simes said last week after the company released 2020 results. Finally, even if Driftwood was to be built at some point in the future, investors' prospects will be capped, as Tellurian's equity would need to be diluted approximately 7x. Looking for a helping hand in the market? Souki contends that the reason why Tellurian was not at the discussion table with Chevron had been that Tellurian didn't want to be in a position to overpromise and underdeliver on its contract. LNG The company estimates that the 27.6 mmty facility would cost $25 billion to build. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Tellurian is being priced as an out-of-the-money option. Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. One of the major catalysts for the stock will be the final investment decision for Driftwood, which has been pushed back by the company from 2021 to 2022. I am not receiving compensation for it (other than from Seeking Alpha). Create your Watchlist to save your favorite quotes on Nasdaq.com. And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. Zacks->. 2023 Natural Gas Intelligence. 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. Tellurian shares were trading around $4.42 per share, up about 0.4%, on Monday afternoon. LNG To read this article on Zacks.com click here. People may receive compensation for some links to products and services on this website. It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. | See here for a complete list of exchanges and delays. | Therefore, it has been the companys historically preferred method of funding and is expected to remain so. 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. Tellurian also has its core business! NGI All News Access. Tellurian (NYSE:TELL) remains a highly speculative stock. The essence of the video states that Tellurian wants profits. Haynesville Shale 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. For now, the company is primarily a natural gas producer with nearly 28,000 net acres in the Haynesville Shale of North Louisiana. Gas producer . Click here to request a trial. Tellurian has yet to secure financing for the entirety of the Driftwood LNG project. Our Standards: The Thomson Reuters Trust Principles. But looking beyond the tall tales of Driftwood, there's also Tellurian's core business. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. I wrote this article myself, and it expresses my own opinions. 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. Type a symbol or company name. Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. NGI All News Access. Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. Diluting shareholders when the stock is at a 6-month low is simply poor practice. 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. 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. Tellurian Inc confirmed on Wednesday it still plans to make a final investment decision to build its proposed $30 billion Driftwood liquefied natural gas (LNG) export project in Louisiana in 2019: Believing that transparent markets empower businesses, economies, and communities, Natural Gas Intelligence (NGI) provides natural gas price transparency and key news, insights and data for the North American energy markets. Sign in to get the best natural gas news and data. Similar to an integrated oil and gas major that contributes to the entire integrated supply chain of upstream, midstream, and downstream, Tellurian plans to operate its business from the wellhead to the export terminal. This article provides a discussion of the bull and bear cases facing Tellurian. | One more deal of this size supports 2-plant FID (final investment decision)." Tellurian has said the first phase of Driftwood would cost about $16.8 billion and produce about 16.5 MTPA of LNG. I argue that this meaningfully improves the bull case. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. It's not just an out-of-the-money option. Phase 1 will consist of three plants with a combined capacity of 16.5 MTPA and an expected cost of US$16.8 billion. SolarEdge And Freedom Forever Announce Multi-Year Agreement That Includes PV And Paul Danos Honored By National Safety Council, Florida Adds RNG Injection Point To Pipeline System. Bitcoin, Like the Internet Itself, Could Change Everything. Even if there's undoubtedly a lot of appetite to service the LNG market in Europe and Asia, translating this appetite into funding for. We are all working together to compound returns. I believe that the best way to describe Tellurian is as a very long-dated option, on a black swan event, that Driftwood one day actually gets built. I have no business relationship with any company whose stock is mentioned in this article. Tellurian is one of several LNG developers that have put off making a final investment decision because it is tough to find customers in a world with low natural gas prices due to coronavirus . Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. Please disable your ad-blocker and refresh. 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. It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. read more. By using this Site or clicking on "OK", you consent to the use of cookies. Tellurian has no signed Final Investment Decision. Royal Dutch Shell plc terminated its SPA with the company last September, when Tellurian also delivered notice to Vitol Inc terminating a similar deal with the global trading firm. I provide a hand-holding service. Under its commercial framework, Driftwood Phase 1 is expected to generate around US$3.7 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) per year. I believe that anyone reading this knows the spiel well. some value. I have no business relationship with any company whose stock is mentioned in this article. Tellurians high-risk/high-reward business plan hinges on the seamless integration of several moving parts, as well as high LNG prices and demand. Tellurian has said the first phase of Driftwood would cost about $16.8 billion and produce about 16.5 MTPA of LNG. The Hartbeespoort dam in South Africa used to be brimming with people enjoying scenic landscapes and recreational water sports. High upside energy, commodity, tech, and dividend stocks. Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. 2 min read. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. Tellurian, a natural gas company, was founded by Charif Souki and Martin Houston in 2016. The stock has jumped by nearly 190 percent YTD but is off 30 percent from the highs it reached in June. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? Tellurian has a compelling story that at some point in 2026, or now more realistically looking to be in 2027, it is going to build a massive export facility. I am not receiving compensation for it (other than from Seeking Alpha). Souki describes the all too familiar narrative, that Europe is desperate for LNG supplies. Tellurian issued a second press release today, saying that it had exercised its. It then announced it would seek equity partners. And that Tellurian could then further increase its total volume. 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. Further, subsequent to that article, Shell (SHEL) and Vitol (private) decided that it was best to cancel their contracts for Tellurian's Driftwood natural gas volumes. I argue that this meaningfully improves the bull. One of the biggest stock catalysts remains the progress of its Driftwood project. This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. Presently, Tellurian's market cap is around $1 billion. All quotes delayed a minimum of 15 minutes. 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. | Driftwood Lng If you have an ad-blocker enabled you may be blocked from proceeding. This means that investors simply aren't buying into Souki's vision. Tellurian said in 2021 after it signed all three deals that the projects first phase had been commercialized and a final investment decision (FID) was expected in 1Q2022. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. 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