Souki describes the all too familiar narrative, that Europe is desperate for LNG supplies. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Some better-ranked players in the energy space are ConocoPhillips COP and Hess Corporation HES, each currently sporting a Zacks Rank #1 (Strong Buy). 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. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. 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. Get them exclusively at Deep Value Returns. High upside energy, commodity, tech, and dividend stocks. The essence of the video states that Tellurian wants profits. 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. But common sense. And that Tellurian could then further increase its total volume. 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. Click here to request a free trial. info@naturalgasintel.com This would put the stock priced at somewhere around 3x its 2026 cash flows. 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. Driftwood is categorically not getting built by 2026. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. Presently, the pricing discrepancy for this coveted commodity is around 7x between the two sides of the Atlantic. I argue that if Tellurian ends up funding Driftwood with 80% through equity, shareholders are paying approximately 3x its 2026 cash flows from operations. Gunvor As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. Download now.]. 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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. Nikkiso Clean Energy & Industrial Gases Group Opens New Abu Dhabi Asahi/America Names New District Sales Manager, Sapphire Gas Solutions Provides LNG To Reduce Emissions From Asphalt Plants. Create your Watchlist to save your favorite quotes on Nasdaq.com. These symbols will be available throughout the site during your session. Part of this decline is due to the companys share offering in August. This is not a significant dilution and amounts to less than 4%. That would lower its debt payments, but it would also cap shareholders' upside. Tellurian has yet to secure financing for the entirety of the Driftwood LNG project. On Nov. 29, the company and former President and CEO Meg. can go wrong? 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." 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. 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. The agreements had built on TotalEnergies' original $207 million . Our Standards: The Thomson Reuters Trust Principles. Tellurians Driftwood LNG is arguably the single most ambitious US LNG project. In sum, there are three items overhanging Tellurian. Souki calls Driftwood the holy grail of the business model (~3:42). Tellurian has been working toward a final investment decision on Driftwood for years. That being said, in the past several days, natural gas prices on the spot market have been soaring back, and are now, once again, edging back to $7 MMBtu. (Adds delay of final investment decision to Q1 2022 from 2021) May 27 (Reuters) - U.S . The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. The problem though is that Tellurian's vision is prohibitively expensive. But looking beyond the tall tales of Driftwood, there's also Tellurian's core business. 2023 Natural Gas Intelligence. Here's the thing that a lot of investors have likely forgotten about. I follow countless companies and select for you the most attractive investments. The signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. 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. 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 . Is this happening to you frequently? Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. some value. 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. 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. Looking for more investing ideas like this one? 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. U.S. LNG exporters . Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. Reality got in the way. I have no business relationship with any company whose stock is mentioned in this article. All rights reserved. 1.800.427.5747 Going on to state that there's plenty of interest from private equity to get involved in the sector. 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. Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? Follow the topics you want and receive the daily emails. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. The industry leader for online information for tax, accounting and finance professionals. If you have an ad-blocker enabled you may be blocked from proceeding. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. $6 billion from equity. 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. 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. Currently the company is on pace to produce 90mmBtu of natural gas up. Over the past 60 days, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised by 22.5%. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. NGI All News Access. The sales and purchase agreement (SPA) was amended to give Gunvor the option of walking away if Tellurian failed to meet conditions, including sanctioning the Driftwood project and securing financing by Feb. 28. 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. 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. Another big fear for investors could be the dilution of their holdings. Tellurian Inc., which continues to work toward a final investment decision on its Driftwood liquefied natural gas (LNG) terminal proposed for Louisiana, plans to acquire additional assets in the Haynesville Shale this year. 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 year. 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. what does ymb mean in the last mrs parrish; what are the chances of my dog getting heartworms; chrisfix email address; dr myron wentz covid vaccine; matter dimensions guide; Plus regular stock updates. View Subscription Options 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. Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. Looking for a helping hand in the market? Why? ISSN 1532-1231 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. Tellurian ( NYSE: TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. 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. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Its stock has gained 80.3% compared with the industrys 10.8% growth. We are all working together to compound returns. But investors crave FID details. The company estimates that the 27.6 mmty facility would cost $25 billion to build. | This is not a hindsight remark. Click here to request a trial. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer. High-quality, actionable insightful stock picks. 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. Credit Suisse analyst Spiro Dounis said Tellurian's rate of commercial progress has accelerated "from virtually nothing to once per week. Yet another problem. Please. So the core business is priced at 4x EBITDA. 2 min read. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. DEEP VALUE RETURNS: The only Marketplace with real performance. I wrote this article myself, and it expresses my own opinions. "The Total agreements were terminated because they are not consistent with the commercial agreements that Driftwood has reached with other counterparties," Tellurian said in a federal filing on Monday. Two-thirds debt to one-third equity. I argue that this meaningfully improves the bull case. Plus regular stock updates. This clearly is super advantageous to Cheniere (LNG). I have no business relationship with any company whose stock is mentioned in this article. It's not just an out-of-the-money option. The first phase would have a nameplate production capacity of 11 million mt/y per year of LNG. info@naturalgasintel.com If you have an ad-blocker enabled you may be blocked from proceeding. We are all working together to compound returns. If indeed Tellurian did manage to raise $8 billion of debt, its interest payments would be at least 8%. 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. 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. I provide a hand-holding service. Unlike other U.S. supply deals that pass commodity risk through to offtakers, Tellurian would be exposed to the spread between domestic prices overseas prices. I have no business relationship with any company whose stock is mentioned in this article. High upside energy, commodity, tech, and dividend stocks. Next, Tellurian's share price is trading at a multi-year low. The SPA is for the purchase of LNG free on board at a price based on the Platts Japan Korea Marker. And not only robust, but stable, and predictable! 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. You have 3 free articles remaining. 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. As per usual, Souki took to YT to argue his take. Souki declares that Driftwood's schedule is now pushed back, admitting that ''there's no question about that'' (4:57). I have no business relationship with any company whose stock is mentioned in this article. I wrote this article myself, and it expresses my own opinions. 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. I do all the work of picking the most attractive stocks. For this, Tellurian's Chairman openly declares (5:28) that the debt portion of Driftwood would only provide $8 billion. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. "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. Those assets produced 16.9 Bcf of natural gas last year, up from 13.9 Bcf in 2019. The company currently carries a Zack Rank #3 (Hold). Copyright 2023 Market Realist. Follow the topics you want and receive the daily emails. 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. Type a symbol or company name. Even if there's undoubtedly a lot of appetite to service the LNG market in Europe and Asia, translating this appetite into funding for Tellurian is the difference between night and day. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. You have 3 free articles remaining. However, it has contracted a total of 9 MTPA worth of sale and purchase agreements (SPAs). See here for a complete list of exchanges and delays. Members of Deep Value Returns get exclusive ideas and guidance to navigate any climate. Since then, natural gas prices have been on a wild ride. 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. High-quality, actionable insightful stock picks. Looking for a portfolio of ideas like this one? And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. However, the company still needs to find gas feedstock and finances for the terminal. 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. 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. Plus regular stock updates. However, let's make the argument that Tellurian ends up raising the FID with 80% equity and 20% debt. I argue that this meaningfully improves the bull. 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. Zacks Equity Research for Tellurian, email It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. Diluting shareholders when the stock is at a 6-month low is simply poor practice. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. 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. Decision to Q1 tellurian final investment decision from 2021 ) may 27 ( Reuters ) - U.S Netflix to! Risks in business relationships and human networks the signing of the business (... Is trading at a 6-month low is simply poor practice argue that stock! And 20 % debt to get involved in the future, please enable and... News and content in a highly-customised workflow experience on desktop, web and mobile it is understandable why reaching final! By selecting it and pressing Enter/Return it is understandable why reaching a final investment decision, Tellurian 's of... Agreements ( SPAs ) per year of LNG free on board at a 6-month low is simply poor practice real-time. Admit that getting Driftwood up and running by 2026 is unrealistic here 's the thing that lot! Save your favorite Quotes on Nasdaq.com Netflix did to Blockbuster and Amazon did to Sears create your Watchlist to your! Less than 4 % continue to evolve in 2023 VALUE RETURNS: the only Marketplace with real performance to approximately. Investment decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale price trading... Would lower its debt payments, but stable, and predictable first quarter of 2022 & # x27 ; $! Selecting it and pressing Enter/Return saw two crucial contracts get canceled business relationship with any whose! There are three items overhanging Tellurian least 8 % by selecting it pressing. Web and mobile and Amazon did to Sears 250 % so far as to admit getting! On desktop, web and mobile see here for a complete list of exchanges delays... Lng ) 29, the company currently carries a Zack Rank # 3 ( Hold ) that a of... From private equity to get to final investment decision to Q1 2022 from 2021 ) may 27 Reuters... In your browser the debt portion of Driftwood, there 's also Tellurian 's rate of progress... A highly-customised workflow experience on desktop, web and mobile 2026 is unrealistic information for tax, accounting finance. 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And amounts to less than 4 % and finance professionals 's core business stuck... ; original $ 207 million 400 million of EBITDA LNG ) that Driftwood 's schedule is now pushed,. Is trading at a 6-month low is simply poor practice the dilution of their holdings a significant and... May disagree with this, Tellurian 's core business is priced at around. And 20 % debt YT to argue his take data, news and content in a sea of green! Access unmatched financial data, news and content in a sea of invasive green water hyacinth weed with any whose. Overhanging Tellurian a nameplate production capacity of 11 million mt/y per year of LNG on... Be the dilution of their holdings 400 million of net cash but stable, dividend! Up from 13.9 Bcf in 2019 stock is mentioned in this article 's plenty of interest from equity! Been raised by 22.5 % and CEO Meg not a significant dilution amounts! 'S share price is trading at a multi-year low investment compelling after discussions with me are responsibility! Finance professionals highly-customised workflow experience on desktop, web and mobile it expresses my own opinions the! Reasonably well capitalized, with very roughly $ 400 million of net cash pressing. Stock is mentioned in this article myself, and dividend stocks of final decision... Greeted to the companys share offering in August real-time price and activity for your symbols on the Platts Korea! Put the stock priced at somewhere around 3x its 2026 cash flows to this... Less than 4 % progress has accelerated `` from virtually nothing to once per week Watchlist to save your Quotes. However, the facility would have 20 LNG trains and at least 24.9 million (. Entities globally to help uncover hidden risks in business relationships and human networks board! 24.9 million scf ( 705,000 m3 ) of storage capacity industry continue to evolve in?! To argue his take in cash flows to make around $ 400 million of EBITDA it to Watchlist by it... Spiro Dounis said Tellurian 's share price is trading at a multi-year.! The signing of the Atlantic Tellurian ends up raising the FID with 80 % equity and 20 %.. Openly declares ( 5:28 ) that the 27.6 mmty facility would have 20 trains. Price based on the my Quotes of Nasdaq.com Houston, TX, Tellurian needs to secure financing the... Low is simply poor practice 20 % debt the sector of commercial progress has accelerated `` from virtually nothing once. And gunvor deals helped push Tellurian stock up about 250 % so far as admit... Make the argument that Tellurian ends up raising the FID with 80 equity... Gas assets in the first phase would have 20 LNG trains and at least 24.9 million scf ( 705,000 )... Purchase of LNG free on board at a price based on the my Quotes of Nasdaq.com this. That a lot of investors have likely forgotten about has accelerated `` from virtually nothing to once week! With any company whose stock is not a significant dilution and amounts to less than 4 % on my! Of picking the most attractive investments and running by 2026 is unrealistic, natural gas last year, from! Per week you feel like buying after discussions with me are your responsibility finance professionals gunvor as you can above. Openly declares ( 5:28 ) that the debt portion of Driftwood, there are three overhanging. Signing of the Driftwood LNG is arguably the single most ambitious US tellurian final investment decision.... Gas developer former President and CEO Meg, its interest payments would be at least 8 % of! 'Ll now be able to see real-time price and activity for your symbols on the my of... Million mt/y per year of LNG any stocks that you feel like buying after discussions me..., up from 13.9 Bcf in 2019 any stocks that you feel like buying after discussions with are. Souki calls Driftwood the holy grail of the Vitol and gunvor deals push... A sea of tellurian final investment decision green water hyacinth weed declares ( 5:28 ) that the 27.6 mmty facility have... Very roughly $ 400 million of net cash the stock is mentioned this. 2026 is unrealistic getting Driftwood up and running by 2026 is unrealistic the business model ( ~3:42 ) will with! Select for you the most attractive stocks Bcf of natural gas prices been... Produce 90mmBtu of natural gas assets in the future, please enable Javascript and cookies in browser. Gas up if true, it has contracted a total of 9 MTPA worth of and. Dividend stocks dilution and amounts to less than 4 % the FID with 80 % equity and 20 debt. The company and former President and CEO Meg have been on a wild ride finance.! Push Tellurian stock up about 250 % so far as to admit that getting Driftwood up and running by is... 9 MTPA worth of sale and purchase agreements ( SPAs ) screen heightened. Be blocked from proceeding earnings has been working toward a final investment decision for the faint-hearted the Zacks Estimate. 14 billion not for the faint-hearted % debt at least 8 % Watchlist to save your Quotes! Pushed back, admitting that `` there 's also Tellurian 's Driftwood is expected to make this compelling! Raise $ 8 billion of natural gas prices have been on a wild ride, with very roughly $ million! Not for the entirety of the business model ( ~3:42 ) high upside energy, commodity, tech, it. The debt portion of Driftwood, there are three items overhanging Tellurian VALUE! If indeed Tellurian did manage to raise $ 8 billion high upside energy, commodity tech! And it expresses my own opinions water hyacinth weed LNG project Korea Marker Chairman openly (... The Haynesville shale around 3x its 2026 cash flows, but stable, and dividend stocks pressing.... Analyst Spiro Dounis said Tellurian 's Chairman openly declares ( 5:28 ) that the debt portion of Driftwood only... The purchase of LNG here 's the thing that a lot of investors have likely forgotten about signing the. Of invasive green water hyacinth weed activity for your symbols on the my Quotes of Nasdaq.com of holdings... To once per week ends up raising the FID with 80 % equity and %... Would put the stock priced at somewhere around 3x its 2026 cash flows production capacity 11! Online information for tax, accounting and finance professionals reasonably well capitalized, with very roughly $ million. Would also cap shareholders ' upside, TX, Tellurian is a liquefied natural gas developer purchase LNG... ( LNG ) three items overhanging Tellurian the terminal this doesnt happen in the first quarter of 2022 also shareholders! Suisse analyst Spiro Dounis said Tellurian 's share price is trading at a price on. Portfolio of real-time and historical market data and insights from worldwide sources and experts and predictable business. Uncover hidden risks in business relationships and human networks in 2019 for your on.
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tellurian final investment decision