Will Tellurian Inc (NASDAQ: TELL) Go North After A 10-Year LNG Agreement With Vitol Inc.?

Tellurian Inc (NASDAQ: TELL) was up 19.17% yesterday and closed at $5.16, closer to its 52-week high of $5.76. Houston, Texas-based Tellurian Inc. announced yesterday that it signed a sales and purchase agreement for liquefied natural gas with Vitol Inc. This agreement is signed for three million tonnes per annum LNG for Tellurian for ten years at Driftwood LNG. Considering the price today, this agreement is valued at almost $12 billion in revenues over the next decade.

Is it wise to invest in TELL right now?

The stock is given a “Hold” consensus rating. The average rating score of the company is 2.40. Tellurian, at present, is developing its infrastructure assets, LNG, and natural gas production portfolio, which also includes 27.6 million tonnes per annum terminal facility of liquefied natural gas. There is also an associated pipeline in Louisiana. Tellurian holds interests in 9,373 net acres of natural gas production properties, alongside 72 producing wells based in Haynesville Shale, Louisiana. With the expanding portfolio and a vision towards growth and diversification, Tellurian seems to be a promising stock at the moment.

Planning to market Driftwood LNG at other indices

The CEO and President of the company, Octávio Simões, said that Tellurian is underway its execution plan for marketing Driftwood LNG volumes on those indices which their customers want to see. Vitol had expressed interest in developing Driftwood earlier too, but now it is fulfilling this agreement with the largest autonomous energy trader in the world.

The future of renewable energy

The world is moving towards cleaner energy sources, and there has been an inclined demand for electrification. The scope of low-cost and reliable energy will increase in the years to follow. Down the line, LNG is bound to become the stable fuel source at an interesting price. The company’s integrated model is positioned for offering volumes on Japan Korea Marker (JKM) along with Dutch Title Transfer Facility (TTF), the two other indices.

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