Tellurian Inc.
TELL
entered a long-term agreement with Gunvor Singapore Pte Ltd to deliver three million tons per annum (Mtpa) of Liquefied Natural Gas (“LNG”) from its Driftwood LNG production and export terminal in Louisiana.
The Driftwood LNG project, which is expected to come online in 2023, involves the establishment of a 27.6-Mtpa LNG terminal and 154.5 kilometers of feed gas pipeline. Notably, Tellurian will supply LNG to commodity trader Gunvor from the proposed LNG facility in the United States Gulf Coast on a free on board (“FOB”) basis for ten years.
The Driftwood project is currently being developed in four phases. Tellurian mentioned that the first phase of the project would cost $16.8 billion and is expected to produce 16.5 Mtpa of LNG. Notably, the facility will boast five LNG plants, with each consisting of one gas pre-treatment unit for condensate and water removal, and four liquefaction units.
In 2019, Tellurian signed a memorandum of understanding with India-based Petronet for the supply of up to 5 Mtpa of LNG from the Driftwood facility. The agreement also included an investment of $2.5 billion for an 18% stake in Tellurian’s Driftwood LNG terminal. However, Petronet stepped away from making an investment, citing the fuel’s abundant supply at cheap prices.
LNG made a significant rebound in recent times from a pandemic-induced demand collapse as nations like India and China purchased more of the fuel to address the increasing energy needs and reduce the reliance on coal. Most importantly, the demand for LNG is expected to increase henceforth, as energy companies are switching to carbon neutrality in the coming years.
On its part, the agreement is expected to generate $12 billion in revenues over the ten years based on current LNG prices. It marks considerable progress for Tellurian in its commercial efforts, following a two-year break in firm activity.
Company Profile & Price Performance
Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer.
Shares of the company have outperformed the
industry
in the past six months. Its stock has gained 174.2% compared with the industry’s 35.2% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Tellurian currently carries a Zack Rank #4 (Sell).
Some better-ranked players in the energy space are
Hess Midstream Partners LP
HESM
,
TOTAL SE
TOT
and
Earthstone Energy, Inc.
ESTE
, each currently carrying a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Hess’ earnings for 2021 are expected to increase 14.7% year over year.
TOTAL’s earnings for 2021 are expected to rise 8.7% year over year.
Earthstone’s earnings for 2021 are expected to increase 31.9% year over year.
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