I’ll be honest, I’m an eternal optimist but this was not an inspiring conference call during arduous times!
- “ It’s a tough market “, mentioned twice in the opening 2 and a half mins
- No strategic plan + vague on options outside of China.
- China the only player in town.
- Nobody is going to execute until trade war is over.
- " If we can get that first customer signed, there is enough interest in us that we “ could “ gain some momentum,". How about use of the word “ will “ ... fairly sure we’ve had enough time over the years to progress “ advanced negotiations ” to signing readiness!
- Europe is a little soft right now, it’s a slow market and that has slowed decision making.
- Very soft spot market so decisions are getting deferred.
My view;
- Anadarko Mozambique executing.
- Sempra Energy (Port Arthur) interestingly signs deal with Saudi Amarco for a huge 5mt!
- I reckon we’ll be hearing some serious noise from Tellurian soon, after Meg Gentle interview with Bloomberg back in March 2019 stating, “ We are looking for partners and I would say we are actually to the stage now of concluding documentation with our partners. I think we’ll have a nice portfolio of majors, traders, Asian counterparties and even some from the Middle East. I would say the shortlist right now, although we are working with about 30 companies that have been in the detailed process... so of that, I think the ones that will go forward quickly, probably half a dozen. We are about a couple of months from being able to conclude and start construction. “ Ok, this bold timeline hasn’t eventuated but... I believe they are on the cusp of a breakthrough announcement which in turn will open up their floodgates!
GV’s thoughts on China, “ China really speaks loudly about the importance and the stability of HH. In our marketing efforts we’ve tried to say to them, look at the strength of the resource, look at how HH has been a very stable and a non volatile price. We’ve done such a good job on that, they actually preach that back to us now. The only real issue right now in China is trade. They are great business people “.
“ I would not expect anybody to execute deals with anyone until the presidents have agreed and trade war is over and we move on “ When he says anybody, he’s not only referring to Chinese entities but worldwide customers as he has stated before that other worldwide nations are hesitant to sign contracts during this ongoing conflict. That just confirms the high likelihood of not being able to sign a single contract with alternative customers during this conflict.
The dilemma we face... Reconciling differences in trade negotiations between the US & China has deteriorated fast and the reality is, should this war continue into 2020, the SP is going to be in for a lot more hurt. Concluding contracting is clearly on ice... now is the opportune, perfect time to switch to a US listing & try create/ maximise shareholder value! We have all the critical milestones in place, shovel ready, Next Decade is @ USD $5.47 while Tellurian is @ USD $8.64 as of 22nd of May. Despite being an Aussie shareholder I’ve always been a strong advocate for leaving the ASX because it’s not justified staying on considering LNG LTD has 2 projects in North America, the head office is in Houston & @ 36c and dropping, there will undoubtedly be significant upside if we redomicile to the US.
I urge SHs to speak up, voice your support behind the switch if you truly believe in the benefits vs where we are today. Your vote of approval could make a difference, management and the board do listen. We are running the risk of banking on a trade pact on the horizon in which case if that fails to materialise, reiterating, the SP will suffer the consequences! There’s a board meeting next week. Email addresses of board members & CEO;
[email protected] [email protected][email protected][email protected][email protected][email protected]
MCM, you posed a valid question in asking whether IDG might make a take over offer for LNG LTD? Who knows but Magnolia would be primed for a take over (as a fully de-risked project) by an IOC major like Shell or Total, who could take it straight to construction (on balance sheet) and lift a substantial proportion (if need be) of Magnolia’s 8.8mt as an anchor offtake. That would be a last resort scenario IF we were struggling to secure customers. But the beauty of our company is that it’s not a “ one trick pony “. We have a plethora of options up our sleeve to raise capital should times become dire with finances;
A) Could license our OSMR.
B) Could sell our equity.
C) Could sell Bear Head, which was bought on Aug 27 2014 for USD 11 Million from a subsidiary of Anardarko Oetroleum (a 255 acre site). Then on April 8 2016 Bear Head acquired a further 72.45 acres located at PointTupper/ Bear Head Industrial Park in the Strait of Canso from NSBI for $450K.Prior owners had spent more than $100 million to design, complete engineering work and site construction of the BearHead LNG site in the early 2000’s maintaining the facility in hot‐idle status. The land should be worth more than it was when we purchased it, a cracker of a location!An interesting tidbit - the Strait of Canso is one of the world’s deepest, ice-free, dredge free harbours!
I’ve made reference to this in the past, once the first anchor offtake is locked in, the domino effect should ensue. During these challenging times it’s just a reminder that we’re just one SPA away from changing the ball game! Dates of when SPAs were signed by US projects;
Sabine Pass:
3.5mt BG (now Shell) 26 Oct 2011
3.5mt Fenosa 21 Nov 2011
3.5mt Gail 11 Dec 2011
3.5mt Kogas 30 Jan 2012
2mt BG 1 Feb 2012
2mt Total 17 Dec 2012
1.75mt Centrica 25 Mar 2013
Corpus Christi:
.76mt Pertamina 4 Dec 2013
1.5mt Endesa 2 Apr 2014
.75mt Endesa 7 Apr 2014
.80mt Iberdrola 30 May 2014
1.5mt Fenosa 2 Jun 2014
.85mt Woodside 30 Jun 2014
.77mt EDF 17 Jul 2014
.60mt Chile 3 Aug 2015
.77mt EDF 21 Sep 2015
.90mt Engie 28 Oct 2015
Cameron:
1.2mt Tepco 7 Feb 2013
4mt Mitsubishi 16 May 2013
4mt Mitsui 16 May 2013
4mt 16 May 2013
.4mt Pavillion 23 Sep 2014
Freeport:
4.4mt Osaka Gas 31 Jul 2012
4.4mt BP 11 Feb 2013
2.2mt Toshiba 9 Sept 2013
2.2mt SK 9 Sep 2013
Dominion Cove:
2.3mt Sumitomo 1 Apr 2013
2.3mt Gail 5 Dec 2014
Updated list of projects awaiting FID;
Venture Global
1mt Shell 8 Feb 2016
1mt Edison 27 Sept 2017
1mt Shell 6 March 2018
1mt GALP 2 May 2018
2mt BP 21 May 2018
2mt PGNiG 26 Jun 2018
1mt Repsol 10 Sept 2018
1mt PGNiG 17 Oct 2018 (+1mt with Plaquemines
Anadarko Mozambique
2.6mt Centrica & Jera 5 Feb 2019
1mt Bharat Petroleum 17 Feb 2019
1mt Pertamina 19 Feb 2019
1.6mt Jera & CPC 13 May 2019
Our distinguished, elite crew;
Greg Vesey CEO) - Over 35 years experience at Chevron and was President of Chevron Natural Gas & Vice President of Gas Supply and Trading from 2011 to 2015 where he was responsible for Chevron’s global LNG, natural gas, and natural gas liquids marketing and trading activity. GV was responsible for overseeing 12MT over 9 contracts from 2011 till Jan 20 2015 with those being;
SK4.15mt 5yrs signed Jan 21 2015
Tohoku.9mt 20yrs Oct 1 2013
Chubu1mt 20yrs Mar 28 2013
Tepco.4mt 20yrs Jun 18 2012
Verve/Synergy.85mt Nov 30 2011
Kyushu.7mt 20yrs Sep 15 2011
Tepco3.1mt 20yrsJul 26 2011
JX Nippon.3mt 15yrs May 10 2011
Kyushu.3mt 20yrsJan 24 2011
John Baguley (Chief Operating Officer) - Over 35 years of LNG EPC experience. Worked for KBR for 30yrs including 13yrs as a Project Director in the delivery of front end engineering design and EPC services for major LNG plants and projects in; Malaysia Trains 1-3, Woodside NWShelf 1-2, Qatargas Trains 1-2, Bontang Train H,Tangguh LNG Trains 1-2
Rafael Hernandez, (V.P. Engineering & Construction) - Over 21 years experience at Bechtel and ExxonMobil. Construction Director for the Sabine Pass LNG project. Construction Coordinator at Equatorial Guinea LNG. Chief Construction Engineer for the three simultaneousmega LNG projects; QCLNG, GLNG, and APLNG.
Paul Cavicchi (Chairman) - Executive Vice President of Strategy, Risk and Portfolio for GDF Suez Nth America (27yrs) who’s responsibilities included contributing to the long-term positioning of the company by ensuring an understanding of the external environment and business drivers.
Philip Moeller (Non Executive Director) - Left Federal Energy Regulatory Commission (FERC) in October 2015 as not only the second-longest serving member in the history of FERC, but also the only person in the federal government in a Senate-confirmed position who was nominated by both President George W. Bush and President Barack Obama.
Where do we go from here? Time to go in-to hibernation during winter, spring... wake me up in summer!
Magnolia will come to fruition!
JK.
