Tellurian plans next stage of LNG development with feed gas increase and finance and engineering plans

Thursday, 04 November 2021
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Tellurian Inc., the developer of the Driftwood LNG export plant in Louisiana and set to supply commodities trading firms Gunvor and Vitol as well as Royal Dutch Shell, has reduced losses in the third quarter.

The company posted losses of $15.9 million compared with a $29.5M loss during the prior-year period.

Tellurian’s revenues increased to $15.6M, up 9 percent from $14.3M reported in the same three month of 2020.

“Tellurian recently brought production online from two newly completed natural gas wells, adding to our financial strength and integrated model that provides a valuable hedge to volatile global prices,” said President and Chief Executive Octávio Simões.

“By year end 2021 we plan to produce approximately 70 million cubic feet equivalent per day,” added the CEO.

Simões said that the Houston, Texas-based company was also in discussions with counter-parties to expand the gas resources in the Haynesville Shale basin.

In addition, Tellurian has authorized a new drilling programme and plans to drill 12 to 14 wells to produce about 220 million cubic feet equivalent per day by year-end 2022.

The company plans to give US construction and engineering company Bechtel notice to proceed with construction in early 2022 for the site at Lake Charles where Tellurian also sealed a long-term lease option for a minimum of 20 year and options for 50 years.

Initial work includes pipeline relocation, highway and road widening, electrical infrastructure removal and the drilling of water wells.

Finance focus

Tellurian has now turned its focus to financing Driftwood LNG to the tune of $16.8 billion.

CEO Simões said that the Vitol, Gunvor and Shell deals have opened the way for positive project financing in that 9 million tonnes per annum of LNG has already been pre-sold.

As part of corporate activities during the quarter around $116M was raised in a public stock offering.

Subsequently Tellurian transferred its common stock listing from the Nasdaq Capital Market to the NYSE American.

Tellurian ended its third quarter with about $210.8M in cash and cash equivalents and no borrowing obligations.

“Tellurian has a strong balance sheet consisting of approximately $483.9M in total assets,” it added.

 

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