Tellurian gains more time to fulfill LNG supply deal with Gunvor

1/1/2023

(Reuters) - Tellurian Inc has revised its agreement with a unit of commodity trader Gunvor Group, securing the U.S. LNG developer more time to meet its last remaining major supply deal.

The company now has until Jan. 31, 2023, a one-month extension, to meet certain terms of the deal, according to a filing on Friday. The amendments include changes to the index pricing of the fuel to be sold.

Tellurian in May last year signed the deal with Gunvor to supply 3 MMtpy of LNG. The deal had represented the equivalent of about $12 billion in revenue over the agreement's 10-year term when announced.

The deal is seen as crucial to Tellurian constructing its 27.6 MMtpy Driftwood LNG facility in Louisiana, especially after the Houston-based firm lost two of its biggest customers, Shell and Vitol, earlier this year.

Friday's amended terms also allow Gunvor to end the deal immediately, instead of providing a 45-day advance notice.

Tellurian also agreed to a new sale of up to $500 million in common shares to T.R. Winston & Co, replacing agreements with B. Riley Securities and Credit Suisse to sell up to $200 MM in bonds and up to $189 MM in shares.

The troubled company had earlier this year scrapped a $1-billion high-yield bond sale that would have funded the initial construction of the proposed multi-billion facility.

Shares of Tellurian fell 5.2% to $1.67 in morning trading. They are down 45% for the year.

(Reporting by Ruhi Soni in Bengaluru)