Tellurian Signs 10-year LNG Sales Agreement Valued at US$12 Billion

May 30, 2021

Source: Streetwise Reports   05/27/2021

Tellurian Inc. shares traded 18% higher after the company reported it entered into an agreement with Gunvor Singapore Pte. Ltd. to provide 3 million metric tons of liquefied natural gas yearly, representing “the equivalent of approximately $12 billion in revenue” over the 10-year term.

Natural gas production, pipeline and LNG port operator Tellurian Inc. (TELL:NASDAQ) and Gunvor Singapore Pte. Ltd., today announced that the two companies have entered into “a liquefied natural gas (LNG) sales and purchase agreement (SPA) for three million tonnes per annum (mtpa) for a ten year period.”

The firms indicated that over the course of the agreement, LNG prices are to be calculated based upon a formula derived from the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF) indices. The report stated the total amount of the deliveries will be netted back to adjust for associated transportation charges.


Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter





Get our Weekly Commitment of Traders Reports: - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.





Under the contract terms, “the LNG will be delivered free on board (FOB) from Tellurian’s Driftwood LNG, a 27.6 mtpa liquefaction facility proposed near Lake Charles, Louisiana, in the United States Gulf Coast.”

The company’s President and CEO Octávio Simões commented, “Tellurian intends to market up to 10 mtpa of LNG in our first phase on a JKM, TTF or blended price basis, as our integrated model provides the flexibility to offer this valuable product. We welcome Gunvor, the largest independent global trader of LNG volumes, to Driftwood and look forward to providing a cleaner fuel to meet growing global energy needs and enable energy access.”

Tarek Souki, Tellurian’s E.V.P. of LNG Marketing & Trading, remarked, “Our business model creates significant value for Tellurian; at today’s LNG prices, this agreement represents the equivalent of approximately $12 billion in revenue over the 10-year term of the agreement.”

Tellurian Inc. is an oil and gas exploration and production company that is now concentrating its efforts primarily upon developing low-cost liquefied natural gas (LNG) projects along the Gulf Coast in the U.S. for export worldwide. The company advised that “it is developing a portfolio of natural gas production, LNG marketing and trading, and infrastructure that includes an approximately 27.6 mtpa LNG export facility and an associated pipeline.”

The report indicated that Gunvor is the leading independent global trader of liquefied natural gas (LNG). As an independent commodities trading house, the company notes that it specializes in moving physical energy from the place where it is sourced and stored to where it is highest in demand globally.

Tellurian began the day with a market cap around $1.3 billion with approximately 409.6 million shares outstanding and a short interest of about 6.7%. TELL shares opened nearly 26% higher today at $3.99 (+$0.82, +25.87%) over yesterday’s $3.17 closing price. The stock has traded today between $3.58 and $4.13 per share and is presently trading at $3.72 (+$0.55, +17.51%).

Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.