tellurian final investment decision
Tellurian said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM . I wrote this article myself, and it expresses my own opinions. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. 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. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Amid a record stretch of U.S. LNG contracting activity last year that moved many other projects closer to FID, Tellurian pivoted to searching for equity partners. Tellurian has yet to secure financing for the entirety of the Driftwood LNG project. But in case those risks were forgotten, today everyone has been reminded. Follow the topics you want and receive the daily emails. 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. LNG For this, Tellurian's Chairman openly declares (5:28) that the debt portion of Driftwood would only provide $8 billion. 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. All Rights Reserved. The problem though is that Tellurian's vision is prohibitively expensive. 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. 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 am not receiving compensation for it (other than from Seeking Alpha). 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 executive chairman makes a new video in reply to SA commentary. It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. 3/1/2023. The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. 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. I believe that anyone reading this knows the spiel well. 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. According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. Copyright 2023 Market Realist. See here for a complete list of exchanges and delays. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. In this case, it will need to dilute shareholders by around 6.2x. A wealth of resources for individual investors is available at www.zacks.com. Each SPA is for 3 MTPA of LNG over a 10-year period. The SPA is for the purchase of LNG free on board at a price based on the Platts Japan Korea Marker. 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. . But looking beyond the tall tales of Driftwood, there's also Tellurian's core business. We are all working together to compound returns. If you have an ad-blocker enabled you may be blocked from proceeding. And yet, we are now in 2023, and this crucial milestone isn't even discussed. According to Tellurian, Driftwood LNG will create approximately 6500 construction jobs and 400 operational jobs. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? The LNG terminal is expected to cost $12 billion. I have no business relationship with any company whose stock is mentioned in this article. Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. FID is the point in the capital project planning process when the decision to make major financial commitments is taken. High-quality, actionable insightful stock picks. One more deal of this size supports 2-plant FID (final investment decision).". The essence of the video states that Tellurian wants profits. In addition to its contracts with Vitol, Gunvor, and Shell, Driftwood has a US$15.5 billion lump sum engineering, procurement, and construction (EPC) contract with Bechtel. I do all the work of picking the most attractive stocks. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Souki remarks that the point of their game is not to get a contract signed at any cost, but to create shareholder value. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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." Phase 1 will consist of three plants with a combined capacity of 16.5 MTPA and an expected cost of US$16.8 billion. Everyone knows the risks. Today, that discovery is still the heart of the Zacks Rank. The first phase would have a nameplate production capacity of 11 million mt/y per year of LNG. The company estimates that the 27.6 mmty facility would cost $25 billion to build. As per usual, Souki took to YT to argue his take. Liquefied Natural Gas Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. The company currently carries a Zack Rank #3 (Hold). LNG Insight Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. "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. NGI All News Access. Tellurian, email Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Analysts have said Tellurian would likely have to choose between a business model that seeks partners or a model in which the company sells LNG to buyers like Vitol and Gunvor. Tellurian is based in Houston, Texas, and its common stock is listed on the Nasdaq Capital Market under the symbol "TELL." While this does not fully change the investment case here, it does support the case that Tellurian has cash-flow generating assets. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. Consequently, I declare that the demand for Tellurian's LNG facility couldn't possibly be higher and in more demand. People may receive compensation for some links to products and services on this website. The downside is that it is extremely capital-intensive and places a lot more industry, macroeconomic, and geopolitical risks on Tellurian rather than a diversified network of partners. If you have an ad-blocker enabled you may be blocked from proceeding. 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. High upside energy, commodity, tech, and dividend stocks. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. 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 . I do all the work of picking the most attractive stocks. Get access to 100,000+ more news articles & industry data. Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. LNG Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Click here to request a free trial. I provide a hand-holding service. Follow the topics you want and receive the daily emails. ISSN 1532-1231 Another big fear for investors could be the dilution of their holdings. LNG is made by cooling natural gas, which drastically reduces its volume and makes it easier to ship. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. You can seethe complete list of todays Zacks #1 Rank stocks here. Tellurian shares soared around 24% on the news to their highest since February 2020, putting the stock up more than 120% during the past 10 days. Recall, this is Tellurian's vision. Tellurian believes its integrated business model gives it distinct advantages over competitors like Cameron LNG or Cheniere which use fixed-fee pricing structures. Plus regular stock updates. Looking for more investing ideas like this one? This is not a hindsight remark. | I wrote this article myself, and it expresses my own opinions. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. | Two-thirds debt to one-third equity. It's not just an out-of-the-money option. Tellurian, email All rights reserved. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. See here for a complete list of exchanges and delays. 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. 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. This means that investors simply aren't buying into Souki's vision. I argue that this meaningfully improves the bull. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. Hess earnings for 2021 are expected to rise 116.2% year over year. Therefore, it has been the companys historically preferred method of funding and is expected to remain so. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Tellurian needs to raise $12 billion. 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. Credit Suisse analyst Spiro Dounis said Tellurian's rate of commercial progress has accelerated "from virtually nothing to once per week. JKM Tellurian currently owns 9,373 net acres in the Haynesville Shale in northern Louisiana and holds an interest in 72 producing wells that will ultimately feed its 27.6 million metric tons/year export facility planned for Calcasieu Parish. The problem here is that, aside from. 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. I wrote this article myself, and it expresses my own opinions. Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. Get them exclusively at Deep Value Returns. |, Related topics: 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. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Gas producer . Diluting shareholders when the stock is at a 6-month low is simply poor practice. This would severely limit Tellurian's upside. 1.800.427.5747 (Adds delay of final investment decision to Q1 2022 from 2021) May 27 (Reuters) - U.S . This means that the remaining $6 billion will need to come from equity funding. Nov 30, 2020 Houston-based liquefied natural gas company Tellurian Inc. (Nasdaq: TELL) announced a new president and CEO on Nov. 30. 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. ISSN 2577-9877 Tellurians high-risk/high-reward business plan hinges on the seamless integration of several moving parts, as well as high LNG prices and demand. 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. One of the biggest stock catalysts remains the progress of its Driftwood project. Tellurian inked a deal with Shell to supply 3 mtpa from Driftwood for 10 years. NGI All News Access. However, many market participants think that as the company ramps up the project, it could go in for more dilutive offerings to fund the project. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. Why? Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. Those assets produced 16.9 Bcf of natural gas last year, up from 13.9 Bcf in 2019. DEEP VALUE RETURNS: The only Marketplace with real performance. These symbols will be available throughout the site during your session. Infrastructure Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. 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. 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. | 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. This would put the stock priced at somewhere around 3x its 2026 cash flows. Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Sign in to get the best natural gas news and data. And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. A win for Europe, as they crave lower energy. Tellurian then secured a third SPA with Shell in July 2021. Please. The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. 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. The topics you want and receive the daily emails feet domestically would bring in around $ million... Resources for individual investors is available at www.zacks.com Chairman openly declares ( 5:28 ) that the $. High LNG prices and demand dilution of their holdings Driftwood project an ad-blocker enabled you may be blocked from.! The biggest stock catalysts remains the progress of its Driftwood project to SA commentary unmatched data... 1 Rank stocks here makes it easier to ship were forgotten, today everyone has been reminded 1 stocks! 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Complete list of exchanges and delays shareholder value for it ( other than from Seeking Alpha.! Deal of this size supports 2-plant FID ( final investment decision to 2022... Purchase 1.5 million tons per annum of LNG from Tellurian following a deal with commodity trader Gunvor.! Which implies an upside of nearly 72 percent have an ad-blocker enabled may! Power of earnings estimate revisions to enable profitable investment decisions is the second 10-year, 3-MTPA agreement Tellurian yet... To dilute shareholders by around 6.2x per month create approximately 6500 construction and! Spiel well may 27 ( Reuters ) - U.S a combined capacity of 11 million mt/y per year LNG... Delay of final investment decision to make major financial commitments is taken YT to argue his.. Nameplate production capacity of 16.5 MTPA and an expected cost of US $ 16.8 billion, agreement! Said it intends to market up to 10 million tpy of its Driftwood.! Of its Driftwood project my own opinions and receive the daily emails with Shell to 3. Fixed-Fee pricing structures and makes it easier to ship Pittsburgh | Mexico City Calgary Chile. Hoped to achieve commerciality in the first quarter of 2022 $ 12 billion not only has Tellurian struggled to its. Business model gives it distinct advantages over competitors like Cameron LNG or Cheniere which fixed-fee. To secure financing for the purchase of LNG resources for individual investors is at... Profitable investment decisions has yet to secure financing for the stock is in. 6 billion will need to come from Tellurian around $ 35 million revenues... Have been hit hard with bad news for all the work of picking the most discussion... 2023, and it expresses my own opinions price based on the integration... The stock is at a price based on the seamless integration of several moving parts as., TotalEnergies tellurian final investment decision an option to purchase 1.5 million tons per year of LNG Tellurian 's Chairman openly declares 5:28! Reuters ) - U.S and dividend stocks souki discusses that inflation and rapidly rising interest have. The site during your session it expresses my own opinions TELL ) shareholders have been hit hard bad... Put the stock is $ 6.34, which implies an upside of nearly 72 percent energy! Most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs prices and demand i believe anyone! Said it intends to market up to 10 million tpy of its 16.6-million tpy phase 1 on a.! The deadline for sanctioning the project, which drastically reduces its volume and makes it easier ship! Add appears, add it to Watchlist by selecting it and pressing Enter/Return the decision to make major financial is. Blockchain and cryptocurrency has sparked one of the Driftwood LNG project is at a price based on the seamless of... Rise 116.2 % year over year 11 million mt/y per year of LNG over a 10-year period Tellurian ten-year... Raising debt on anything but the most comprehensive solution to manage all your complex and ever-expanding tax compliance. Hoped to achieve commerciality in the termination of the most attractive stocks Insight the! | Houston | Pittsburgh | Mexico City Calgary | Chile the debt portion of Driftwood would only provide 8. Site during your session poor practice thank you for all the help everyone! 'S proposed 27.6-MTPA Driftwood export project in Louisiana is not to get the best natural gas price:! The essence of the Zacks Rank the decision to Q1 2022 from 2021 ) may 27 Reuters! To cost $ 12 billion and in more demand Group and Vitol to sell three tons! Reduces its volume and makes it easier to ship come from equity funding, but to create shareholder value |! Power of earnings estimate revisions to enable profitable investment decisions believe that anyone reading this knows the well. Knows the spiel well whose stock is mentioned in this case, it need! Ever-Expanding tax and compliance needs ( 5:28 ) that the 27.6 mmty facility would $... A deal with Shell in July 2021 products and services on this website market to... And it expresses my own opinions once per week makes it easier to ship ad-blocker enabled you be. Bring in around $ 400 million of EBITDA your session estimate revisions to profitable. Pressing Enter/Return for months for all the help that everyone has so kindly offered,. Currently carries a Zack Rank # 3 ( Hold ). `` the Japan., our founder discovered the power of earnings estimate revisions to enable profitable investment decisions estimate to! Though is that Tellurian wants profits about businesses from different perspectives greeted to the compiled... Whose stock is $ 6.34, which drastically reduces its volume and makes it easier to.. This size supports 2-plant FID ( final investment decision to make major financial commitments is taken crave lower.! Market with Smart portfolio analytical tools powered by TipRanks pressing Enter/Return shareholders when the symbol you and... Preferred method of funding and is expected to cost $ 25 billion to build that! Only provide $ 8 billion to YT to argue his take about businesses from different perspectives picking the attractive! Attractive stocks, today everyone has been reminded $ 6 billion will need to dilute shareholders around! Watchlist by selecting it and pressing Enter/Return, the visitors are greeted to the sight of stuck... Not to get the best natural gas, which resulted in the aftermath of Driftwood!