$17B LNG Project Developer Blasts Short Sellers

$17B LNG Project Developer Blasts Short Sellers
In a video posted on YouTube, Charif Souki said speculators betting against the company's stock are poised to lose.

(Bloomberg) -- The chairman and co-founder of Tellurian Inc., which is trying to develop a $17 billion liquefied natural gas project in Louisiana, is blaming short sellers after a precipitous plunge in the company’s stock price.

In a video posted on YouTube, Charif Souki said speculators betting against the company’s stock are poised to lose.

“What do you think is going to happen when we start announcing these long-term commercial agreements that we’ve been working on for so long?” Souki said in the video posted Tuesday. “This will be an interesting question and we’ll see how the market reacts when this happens.”

The plunge in energy demand caused by the pandemic dealt a blow to a U.S. LNG boom that saw six gas exporting terminals get built over the past few years. Tellurian is among nearly a dozen projects that hold permits but lack contracts to support construction.

During the last two weeks of March, short positions on Tellurian increased by 9 million shares, reaching about 13.3% of the company’s traded stock, data compiled by Bloomberg show. Their price has tumbled almost 60% since mid-February.

@TellurianLNG Chairman pondering some interesting questions.... #LNG #USLNG $TELL https://t.co/UELF5Z7GKT

— Tellurian (@TellurianLNG) April 20, 2021

Souki said the short sellers could be expecting the company to need to raise money in debt markets or to become “illiquid.”

“Nothing could be further from the truth,” Souki said. “We’ve repaid most of our debt and we’re sitting in a very comfortable liquid position that allows us to contemplate the future very comfortably.”

The company has also vowed to pay all of its debt this quarter and start construction on its Driftwood LNG project this summer.

Seeking to export 27.6 metric tons of LNG per year from Louisiana, the project’s only supporting deal so far is a memorandum of understanding with French oil major Total SE that expires at the end of June. Tellurian has spent the last year in discussions with other overseas buyers, but it remains to be seen if the company can move a deal across the finish line.

In a recent research note, Morgan Stanley estimated that Tellurian only has enough cash to fund another four to six months of expenses before the company needs to raise more capital.

“With the global recovery still in its very early stages, we expect limited contracting activity,” Morgan Stanley researchers wrote.

© 2021 Bloomberg L.P.



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