On Thursday, Houston, Texas-based Tellurian Inc. (NASDAQ: TELL), the U.S. liquefied natural gas developer, announced that it signed an agreement for 3 million tonnes per annum LNG with Gunvor Group. The shares of Tellurian surged about 24%, the highest since February, on account of the agreement. Additionally, the company also announced that its Louisiana-based Driftwood export plant is positioned for commerciality for Q1-2022. LNG shall be delivered from 27.6 mtpa liquefaction facility of Driftwood. The facility is proposed near Lake Charles on United States Gulf Coast.
Revenue benefit of agreement
The company said that the new agreement is equivalent to a revenue of about $12 billion over a decade. The move seems to be strategically inclined towards LNG exchange at a cost and is expected to create significant business value. More Asian buyers, such as China and India, remain inclined to buy super-cooled fuel to meet their consumption demand. Matching the demands of countries with a larger population will help Tellurian hit new highs.
Meeting the rising clean fuel demand
The new demand has constantly been rising for LNG, which also helps consumers position towards sustainable and greener environment goals. The company’s President and CEO Octávio Simões stated that Tellurian is aiming LNG market up to 10 mtpa in its first phase. Gunvor is the largest autonomous international trader of higher LNG volumes and will serve LNG to Driftwood. It is also the largest (by turnover) trading houses dealing in commodities that creates logistic solutions for efficient transportation of physical energy to demand site from the source site.
To facilitate the growing demand for cleaner energy resources and ensure energy accessibility, the deal will provide fuel to its consumers. Through this new facility and providing LNG to meet consumer demand, the company aims at providing value to the shareholders. The investors see this low-cost gas business as a key strategic decision, where the company is developing a future-ready portfolio and meeting it with fruitful deals.