(Reuters) - Liquefied natural gas (LNG) producer Tellurian Inc said on Monday that it planned to cut spending and was seeking to extend the maturity date of a loan, as it looks to cope with weak demand and low prices for the fuel.
A collapse in gas prices globally over the past few months amid a glut has caused several firms developing LNG export terminals in North America to delay final investment decisions (FID) on a number of projects.
“Given current global financial market conditions and increasing restrictions on travel caused by the onset of coronavirus, we are taking the steps necessary to focus on preserving the value we have created at Tellurian and Driftwood LNG,” Chief Executive Officer Meg Gentle said.
The coronavirus epidemic dealt a fresh blow to global gas prices as demand fell in China, the epicenter of the epidemic.
Gas prices were already falling for months on mild winter weather in Europe and Asia, record gas stockpiles in Europe and concerns about global growth because of the U.S.-China trade war.
The company said it was looking to reduce its corporate overhead to about $6 million per month and had started talks with its lender to extend the maturity of its loan due May 2020.
“We are highly confident that when travel restrictions are eased, we will be able to finalize several negotiations to complement the Petronet agreement and allow us to reach final investment decision (FID),” Gentle said.
Petronet LNG Ltd is one of the company’s largest customers and there were reports last week that the Indian company had solicited offers to buy LNG in the market.
Reporting by Shanti S Nair in Bengaluru