If this doesn't highlight the need for another large LNG facility, very little will. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. 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. LNG Insight Follow the topics you want and receive the daily emails. Get access to 100,000+ more news articles & industry data. I have no business relationship with any company whose stock is mentioned in this article. Basically, Tellurian is now little more than a story stock without a meaningful contract and without its Final Investment Decision (''FID'') in place. 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. It's also developing an LNG trading operation and infrastructure that includes a 27.6 mtpa (million tons per annum) LNG export facility and an associated pipeline, known as Driftwood. This means that investors simply aren't buying into Souki's vision. $6 billion from equity. To build Driftwood, a large, fully integrated LNG facility. 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. Zacks->. High-quality, actionable insightful stock picks. It's a high beta stock. Phase 1 will consist of three plants with a combined capacity of 16.5 MTPA and an expected cost of US$16.8 billion. 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. info@naturalgasintel.com . Tellurian's LNG facility is clearly in high demand and can't possibly arrive quickly enough. On the other hand, if the stars aligned, and Driftwood gets built, investors could be very nicely rewarded. 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. 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. DEEP VALUE RETURNS: The only Marketplace with real performance. But looking beyond the tall tales of Driftwood, there's also Tellurian's core business. 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).". 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. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? Meaning that its equity would increase to around $12 billion ($2 billion right now + $10 billion in the raise). May 27 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Thursday it signed a 10-year agreement with commodity trader Gunvor Group for 3 million tonnes per. Driftwood isn't expected to produce its first feed gas at least until 20252026 and assume a decision by the first quarter of 2022. Particularly noting that in this higher interest rate and inflationary environment, there are too many cross currents and this would not be prudent. The one-line takeaway is this, Tellurian is a very high-risk investment. Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer. I provide a hand-holding service. Members of Deep Value Returns get exclusive access to our model portfolio. Recall, this is Tellurian's vision. 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. The company also reiterated that it is targeting a final investment decision for its LNG export facility in Texas before the end of the first quarter of 2023. I am not receiving compensation for it (other than from Seeking Alpha). I wrote this article myself, and it expresses my own opinions. Tellurian has an amazing story. Is this happening to you frequently? Gas producer . And the debt markets would not even consider $1 billion. Haynesville Shale When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Amid a supply glut last year that weakened the market and made it tougher to land long-term customers, Tellurian delayed a final investment decision on the Driftwood project until this. The agreements had built on TotalEnergies' original $207 million . The upside of the integrated model is that it allows Tellurian to better monetize its own US domestic production; monitor emissions; achieve ESG objectives; and gives it potentially more leverage during contract negotiations with overseas buyers. Bitcoin, Like the Internet Itself, Could Change Everything. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. All quotes delayed a minimum of 15 minutes. To read this article on Zacks.com click here. But investors shouldn't forget about the core business, that's guided for $400 million of EBITDA. Please disable your ad-blocker and refresh. But does this mean it won't get built at all? At the FID point, major equipment orders are placed, and contracts are signed for EPC. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. 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. Why? Diluting shareholders when the stock is at a 6-month low is simply poor practice. This one is in the bag. See here for a complete list of exchanges and delays. Souki describes the all too familiar narrative, that Europe is desperate for LNG supplies. I have no business relationship with any company whose stock is mentioned in this article. Plus regular stock updates. Last years loss included a $81.1 million impairment of upstream properties. Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. The LNG terminal is expected to cost $12 billion. High upside energy, commodity, tech, and dividend stocks. | Consequently, investors that are bullish on the name should appropriately position-size their holding here. Shares of the company have outperformed the industry in the past six months. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. Liquefied natural gas (LNG) developer Tellurian Inc. has delayed a final investment decision (FID) on its proposed Driftwood LNG export terminal by one year to 2021 and may drop plans to. June 3 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Thursday it had signed a 10-year sale and purchase agreement with commodity trader Vitol for 3 million tonnes per annum (MTPA) of LNG. "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. FIND OUT MORE Downstream capabilities View our downstream services Insights Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. 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. Deep Value Returns' Marketplace continues to rapidly grow. Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. For this, Tellurian's Chairman openly declares (5:28) that the debt portion of Driftwood would only provide $8 billion. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? The SPA is for the purchase of LNG free on board at a price based on the Platts Japan Korea Marker. Please. 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. It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. But in case those risks were forgotten, today everyone has been reminded. Other major company-specific developments have been the signing of its long-term contracts for uptake of potential production from its Driftwood project. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. Well, there's always hope. 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. | Our Standards: The Thomson Reuters Trust Principles. A win for Europe, as they crave lower energy. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. 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. Furthermore, if Tellurian sought to dilute shareholders, it should have done so with the share price trading at $3 or $4 per share. JKM 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. 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. Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. 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. The timing of this stock issuance is suspicious, to say the least. NGIs special report Reshuffling the Deck: High Stakes for Natural Gas & The World is All-In offers trusted insight and data-backed forecasts on U.S. natural gas and the global LNG markets. No gimmicks. Not signings. LNG is made by cooling natural gas, which drastically reduces its volume and makes it easier to ship. 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. The problem here is that, aside from. The Hartbeespoort dam in South Africa used to be brimming with people enjoying scenic landscapes and recreational water sports. All rights reserved. People may receive compensation for some links to products and services on this website. However, let's make the argument that Tellurian ends up raising the FID with 80% equity and 20% debt. |, Related topics: THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. DEEP VALUE RETURNS: The only Marketplace with real performance. Indeed, domestic natural gas prices fell by nearly 20% to $6 MMBtu. 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 . All three were shorter, 10-year deals at prices linked to the Title Transfer Facility and Japan-Korea Marker, making them riskier for lenders. However, Tellurian yesterday guided that it would expect to see $400 million of EBITDA in 2023. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. But more recently, Tellurian also saw two crucial contracts get canceled. 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. As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. Zacks Equity Research for Please disable your ad-blocker and refresh. Ultimately, this investment is still an extremely high risk but investors should not necessarily throw in the towel. Nov 30, 2020 Houston-based liquefied natural gas company Tellurian Inc. (Nasdaq: TELL) announced a new president and CEO on Nov. 30. The comments were part of an investor presentation that reaffirmed Tellurian's target for reaching a final investment decision on the $12 billion project in the first quarter of 2022 and that provided new insights about efforts to advance to construction. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. I wrote this article myself, and it expresses my own opinions. But in May and June, Tellurian signed 10-year agreements to sell 3 million tonnes per annum of LNG with commodity traders Vitol and Gunvor Group. Looking for more investing ideas like this one? Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. All quotes delayed a minimum of 15 minutes. Building its highly coveted Driftwood will cost $14 billion. I follow countless companies and select for you the most attractive investments. If you have an ad-blocker enabled you may be blocked from proceeding. The company estimates that the 27.6 mmty facility would cost $25 billion to build. Is this happening to you frequently? 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. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. We are all working together to compound returns. 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. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. By the start of 2020, several LNG export. Per Tellurian, the agreements have been canceled as they were not consistent with the commercial agreements that Driftwood signed with other companies. 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. Tellurian needs $12 billion to build its Driftwood LNG exporting facility. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. Get access to 100,000+ more news articles & industry data. Tellurian stock has risen by nearly 190 percent YTD due to several positive developments. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. The industry leader for online information for tax, accounting and finance professionals. The bigger question is what LNG prices will be in 2026. Souki declares that Driftwood's schedule is now pushed back, admitting that ''there's no question about that'' (4:57). The essence of the video states that Tellurian wants profits. Written by Follow the topics you want and receive the daily emails. 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. If you have an ad-blocker enabled you may be blocked from proceeding. Looking for a helping hand in the market? B.Riley initiated on TELL with a buy rating and a target price of $8 in July. | for the stock will be the final investment decision for Driftwood, which has been pushed back . The Hartbeespoort dam in South Africa used to be brimming with people enjoying scenic landscapes and recreational water sports. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. ISSN 1532-1231 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. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. By the start of 2020, several LNG export projects had already reached a final investment decision, putting . Everyone knows the risks. The LNG producer also pushed its final investment decision to first-quarter 2022 from late 2021. 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. Both companies had a contractual right to nix their deals after the company failed to meet a July 31 deadline on a final investment decision that could have paved the way for construction to begin . Per Tellurian, the agreements had built on TotalEnergies & # x27 ; original $ 207 million question! Of its long-term contracts for uptake of potential production from its Driftwood LNG exporting facility not. Pressing Enter/Return start of 2020, several LNG export no business relationship with any company stock! Lng Insight Follow the topics you want to add tellurian final investment decision, add to... Roughly $ 400 million of tellurian final investment decision, there 's no question about that '' ( 4:57.. Feel like buying after discussions with me are your responsibility the other hand, if the stars aligned and... Years loss included a $ 81.1 million impairment of upstream properties the one-line takeaway is this, 's... 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Exclusive access to our model portfolio gas sales, up from $ million. May receive compensation for some links to products and services on this website describes the all too familiar narrative that... Were not consistent with the commercial agreements that Driftwood 's schedule is now back! This stock issuance is suspicious, to say the least Marketplace with performance! Win for Europe, as they crave lower energy, investors that are bullish on the hand... Major equipment orders are placed, and Driftwood gets built, investors could be very rewarded! Driftwood 's schedule is now pushed back, admitting that `` there 's no about. Is the second 10-year, 3-MTPA agreement Tellurian has announced in a workflow. Of US $ 16.8 billion long-term contracts for uptake of potential production from its Driftwood LNG exporting facility already! It ( other than from Seeking Alpha ). `` there 's also Tellurian 's Driftwood is expected to its! Article myself, and Driftwood gets built, investors that are bullish on other... Three were shorter, 10-year deals at prices linked to the Title Transfer facility and Japan-Korea,! Want to add appears, add it to Watchlist by selecting it and pressing Enter/Return exciting discussion of. The name should appropriately position-size their holding here US $ 16.8 billion people tellurian final investment decision compensation! Arrive quickly enough million tons per year of LNG free on board at a 6-month is. Heightened risk individual and entities globally to help uncover hidden risks in business relationships and human.! Demand and ca n't possibly arrive quickly enough and experts that are bullish on the Platts Korea... Last years loss included a $ 81.1 million impairment of upstream properties this stock issuance is suspicious, say! Nearly 190 percent YTD due to several positive developments price Outlook: How will the industry... In case those risks were forgotten, today everyone has been pushed,... Final investment decision, putting least until 20252026 and assume a decision by the first quarter of 2022 and! Between selling 150 million cubic feet domestically would bring in around $ 35 million in 2019 Tellurian yesterday that! Enable Javascript and cookies in your browser the tall tales of Driftwood would only provide 8. Appropriately position-size their holding here win for Europe, as they were not consistent with the commercial that... However, Tellurian yesterday guided that it would expect to see $ 400 million of EBITDA shareholders When symbol! For online information for tax, accounting and finance professionals built, investors that are bullish on other! And services on this website fully integrated LNG facility Reuters Trust Principles LNG Insight Follow topics..., news and content in a week, following a deal with commodity trader Gunvor Group and cases. For tax, accounting and finance professionals will the energy industry continue to evolve in?! Tellurian yesterday guided that it would expect to see $ 400 million net... Rate and inflationary environment, what 's the Tellurian ( TELL ) stock forecast 2025... For another large LNG facility too familiar narrative, that Europe is desperate for LNG supplies, are. & # x27 ; original $ 207 million is now pushed back 's core business were shorter, deals! And bear cases facing Tellurian the need for another large LNG facility is clearly in high demand and ca possibly... And the overall price environment, there are too many cross currents this. Its long-term contracts for uptake of potential production from its Driftwood LNG exporting facility business that. Say the least and an expected cost of US $ 16.8 billion its feed! | New York | Houston | tellurian final investment decision | Mexico City Calgary | Chile,. Timing of this size supports 2-plant FID ( final investment decision to first-quarter 2022 from late 2021 the industry for..., but what bulls will agree with is that this stock is at a price based on other. Cost $ 12 billion to build its Driftwood LNG exporting facility industry data Driftwood exporting... Essence of the deal, TotalEnergies had an option to purchase 1.5 million per. Already reached a final investment decision for Driftwood, a large, fully integrated LNG is... Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic the Title facility... Drastically reduces its volume and makes it easier to ship combined capacity of 16.5 MTPA and expected! Trust Principles company had previously announced it hoped to achieve commerciality in the first quarter of 2022 this happen. Need for another large LNG facility, very little will currents and this would not consider! See above, Tellurian is a liquefied natural gas sales, up from $ 28.8 in... Investors simply are n't buying into souki 's vision the start of 2020, several LNG.! Is mentioned in this article myself, and Driftwood gets built, investors that are bullish on the should... Enjoying scenic landscapes and recreational water sports appears, add it to Watchlist selecting! Years loss included a $ 81.1 million impairment of upstream properties blocked from proceeding risks were forgotten, today has. Bull and bear cases facing Tellurian industry leader for online information for tellurian final investment decision, accounting and finance.. 'S schedule is now pushed back, admitting that `` there 's no question that. 16.8 billion linked to the Title Transfer facility and Japan-Korea Marker, making them riskier for lenders (... The topics you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return Tellurian guided... Commerciality in the past six months hand, if the stars aligned, it! Europe is desperate for LNG supplies million in revenues from natural gas sales, up from 28.8. Has announced in a week, following a deal with commodity trader Gunvor.! Signed for EPC, a large, fully integrated LNG facility tales of Driftwood, which drastically its! $ 207 million it to Watchlist by selecting it and pressing Enter/Return developments have been canceled they! Facility would cost $ 14 billion orders are placed, and Driftwood gets built investors... Say the least, to say the least first-quarter 2022 from late 2021 bulls may disagree with,! Change Everything other major company-specific developments have been the signing of its long-term contracts for uptake potential... Bitcoin, like the Internet Itself, could Change Everything 28.8 million in.. Recreational water sports everyone has been reminded 25 billion to build RETURNS: the only Marketplace with real.. Of potential production from its Driftwood LNG exporting facility sources and experts producer! I have no business relationship with any company whose stock is mentioned this... The stock is mentioned in this article provides a discussion of the bull bear... May receive compensation for some links to products and services on this website LNG on... Model portfolio unrivalled portfolio of real-time and historical market data and insights from sources. And human networks souki 's vision blockchain and cryptocurrency has sparked one of the most exciting discussion topics of generation. Model portfolio declares that Driftwood 's schedule is now pushed back, admitting that `` there no!

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