Tellurian Inc. (TELL) stock prices were up by a promising 14.03% as of the market closing on May 26th, 2021, bringing the price per share up to USD$3.17 at the end of the trading day. Subsequent current market fluctuations have seen the stock rise by 20.19%, bringing it up to USD$3.81.
Agreement with Gunvor Group
The company announced on May 27th, 2021 that it had recently signed an agreement with commodity trader Gunvor Group. This agreement had a term spanning 10 years and would see the delivery of 3 million tonnes per annum (mtpa) of LNG. TELL reported the agreement to represent the equivalent of almost USD$12 billion being generated in revenue over the 10-year period.
LNG Sector Imbalance
Recent years have seen a surge in demand for super-cooled LNG as some of the biggest energy-consuming nations like India and China taper off their reliance on coal, which is forecasted to continue soaring to unprecedented highs. Despite this, customers have shown a reluctance to sign long-term purchase agreements in light of global gas prices falling to their lowest point in several years. The plummet in price occurred in 2019 during a supply glut when a record number of LNG projects entered service.
Pandemic Devastation of LNG Space
The onset of the global coronavirus pandemic brought on even further drops in LNG prices, bringing them down to record lows. The company reported along with the announcement of the agreement that the LNG would be supplied from the Driftwood LNG liquefaction facility with a capacity of 27.6 mtpa near Lake Charles, Louisiana in the Gulf Coast of the U.S.
Driftwood LNG Export Project
Earlier in January of the fiscal year 2021, the company reported the Summer of the same year to be the target date for the commencement of construction. The Driftwood LNG export project is valued at USD$16.8 billion dollars. Its first phase has a forecasted operating date of the fiscal year 2025, with an annual production of 16.5 million tonnes to be expected. This equates to almost 2.2 billion cubic feet of natural gas per day. For reference, one billion cubic feet of natural gas sufficiently supplies nearly 5 million typical homes for a full day.
Future Outlook for TELL
TELL stock prices have been on the rise following the announcement of this tenured source of income for such a substantial term period. The company is keen to continue facilitating further growth with the additional resources at their disposal as a result of this transaction. Current and potential investors are hopeful that TELL will be able to leverage opportunities presented to it so as to usher in significant and sustained increases in shareholder value.