Louisiana gas project co-founder blames short sellers

2 minutes

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 fall in the stock price.

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

What do you think about the long term commercial agreements that we have 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 drop in energy demand caused by the pandemic a blow to a U.S. LNG boom that saw six gas export terminals built over the past few years.

Tellurian is one of nearly a dozen projects that hold permits but are not supported by contracts to build them. During the last two weeks of March, trading on Tellurian increased by 9 million shares, which reached about 13.3% of the company's stock, according to Bloomberg- data compiled show.

Their prices have tumbled almost 60% since mid-February; Souki said the short sellers could be expecting the company to need to raise money in the debt markets or to become illiquid. Nothing could be further away from the truth, said Souki; 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 also vowed to pay all of its debt this quarter and start construction on its Driftwood LNG project this summer.

The project has so far mainly focused on exporting 27.6 tons of LNG per year from Louisiana, the only supporting deal that will be concluded with French oil major Total SE by the end of June. Tellurian has spent the last year in talks 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, Tellurian estimated that Morgan Stanley 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, wrote Morgan Stanley researchers. For more articles like this, please visit bloomberg.com at bloomberg.com.

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