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. LNG Tellurian stock has risen by nearly 190 percent YTD due to several positive developments. Tellurian Inc . 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. One of the biggest stock catalysts remains the progress of its Driftwood project. Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". 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. Consequently, investors that are bullish on the name should appropriately position-size their holding here. The LNG terminal is expected to cost $12 billion. Tellurian said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM . Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. That would put its interest payments at close to $640 million. Microsoft Teams Up With Qcells To Achieve 100% Coverage Of Electricity Masdar To Develop 5 GW Of Renewable Energy Projects In Africa, Equal Access To US Forestry For African American Landowners. "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. Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. ISSN 2158-8023 Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. I have no business relationship with any company whose stock is mentioned in this article. |, Related topics: All quotes delayed a minimum of 15 minutes. There simply were no takers. Reality got in the way. In sum, there are three items overhanging Tellurian. The LNG producer also pushed its final investment decision to first-quarter 2022 from late 2021. So is there any hope left for Tellurian? That being said, nobody wants to hear of their stock being diluted, particularly with the stock down so significantly in the past year. | More specially, Souki notes that nothing has happened with its contract with Gunvor. We are all working together to compound returns. You can seethe complete list of todays Zacks #1 Rank stocks here. By using this Site or clicking on "OK", you consent to the use of cookies. Tellurian, email Rumors circulated on social media that Tellurian had lost yet another crucial contract. 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. The stock presently is not pricing in the full potential of Driftwood, because investors don't know the terms on which they will get diluted. I wrote this article myself, and it expresses my own opinions. Last years loss included a $81.1 million impairment of upstream properties. 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. 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. No gimmicks. It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. The company ended 2020 with $78.3 million of cash and cash equivalents and $72.8 million in short-term borrowings. All quotes delayed a minimum of 15 minutes. Four of the analysts have a buy rating, while three have a sell rating on the stock. Nov 30, 2020 Houston-based liquefied natural gas company Tellurian Inc. (Nasdaq: TELL) announced a new president and CEO on Nov. 30. By the start of 2020, several LNG export projects had already reached a final investment decision, putting . Copy and paste multiple symbols separated by spaces. 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. 1.800.427.5747 Tellurian stock has been pumped up this year due to rising natural gas prices and the meme crowd. Hess earnings for 2021 are expected to rise 116.2% year over year. Days before the Shell and Vitol deals were canceled, Tellurian announced that it had withdrawn a high-yield bond sale, citing the impacts of inflation and uncertainty in the debt market. Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. 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,. Tellurian wanted all potential investors to be focused on the holy grail story. As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. Each deal is worth about $12 billion in revenue over the contract period. Ultimately, this investment is still an extremely high risk but investors should not necessarily throw in the towel. The problem though is that Tellurian's vision is prohibitively expensive. Tellurian said that it has received most of the needed permits required for construction and operation with around 30% of the engineering already complete thanks to US$150 million of prior investments. View Subscription Options Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. esgreview.net, Siemens Gamesa Warns Of Further Challenges Ahead For Wind Energy Market In 2022, Rivian EV Production Set To Double In 2023, Nassimi Announces PFAS-Free Production Of All Fabrics. 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. That would mean that for Tellurian to get hold of its much-needed $6 billion via equity, its shareholders would need to be diluted by approximately 7x. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. 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 ( NYSE: TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. I provide a hand-holding service. | Phase 1 will consist of three plants with a combined capacity of 16.5 MTPA and an expected cost of US$16.8 billion. Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. A story that's going to be a win-win for all parties. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. 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 has an amazing story. Bitcoin, Like the Internet Itself, Could Change Everything. 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. The one-line takeaway is this, Tellurian is a very high-risk investment. Type a symbol or company name. swan event, that Driftwood one day actually gets built. 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. Total also will purchase about 20 million additional. While this does not fully change the investment case here, it does support the case that Tellurian has cash-flow generating assets. See here for a complete list of exchanges and delays. LNG is made by cooling natural gas, which drastically reduces its volume and makes it easier to ship. Looking for more investing ideas like this one? You have 3 free articles remaining. Not signings. 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. On the other hand, if the stars aligned, and Driftwood gets built, investors could be very nicely rewarded. 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. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Tellurian is based in Houston, Texas, and its common stock is listed on the Nasdaq Capital Market under the symbol "TELL." Driftwood LNG Plans Move Forward Despite Lack Of Financing. I'll address this momentarily. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. read more. My Marketplace highlights a portfolio of undervalued investment opportunities - stocks with rapid growth potential, driven by top quality management, while these stocks are cheaply valued. Is this happening to you frequently? This would put the stock priced at somewhere around 3x its 2026 cash flows. Shares of the company have outperformed the industry in the past six months. It has $474.2 million in cash and cash equivalents on hand. "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. March 29, 2022 CNG/LNG, Exporting, Industrywide Issues Driftwood LNG plan (click for larger version) Driftwood LNG, a 27.6 million tonnes of LNG per year facility that will cost on the order of $16.8 billion to build, has not made an official final investment decision (FID) to proceed with building the FERC-approved project. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Daily Gas Price Index. Tellurian has been working toward a final investment decision on Driftwood for years. By the start of 2020, several LNG export. It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. Big Reserves Saudi Arabia has some of the world's biggest gas reserves, though they've mainly been used for the domestic market. jamison.cocklin@naturalgasintel.com, In our continuing effort to stay ahead of the changes in physical flows of the North American natural gas market, Natural Gas Intelligence (NGI) is amending the spot market price tables that appear in NGIs various data services by adding one (1) new location, making changes to three (3) existing indexes, and ceasing to publish. Help uncover hidden risks in business relationships and human networks Tellurian, email Rumors circulated social! Holy grail story quarter of 2022. read More high risk but investors should not necessarily in! Expresses my own opinions you want to add appears, add it to Watchlist selecting. Your responsibility 14 tellurian final investment decision be a win-win for all parties by selecting it and pressing Enter/Return bullish on the priced. 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tellurian final investment decision