Petronet to invest $2.5 bn in Houston's Tellurian Inc for 5 mn tonnes gas

Topics Petronet | Petronet LNG | LNG

India's largest LNG importer Petronet will invest USD 2.5 billion for nearly 20 per cent equity stake in US energy major Tellurian Inc's Driftwood project to negotiate the purchase of 5 million tons of gas per annum.

The Houston-based Tellurian and Petronet LNG Ltd (PLL) signed an MOU on Saturday under which the Indian company and its affiliates will import 5 million tons of LNG from America over a 40-year period.

The agreement also includes PLL making investment in the equity of USD 28 billion Driftwood project in Louisiana to secure the LNG.

"On the sidelines, an MoU was signed between Tellurian, a Houston based energy major and Petronet LNG. Petronet will invest USD 2.5 billion in Tellurian's proposed Driftwood LNG export terminal, in exchange for the rights to 5 million metric tons of LNG per year over 40 years," Ministry of External Affairs said in a statement.

The Petronet deal, the largest by an Indian company in US LNG, came after Prime Minister Narendra Modi had a meeting with the CEOs of top US-based oil companies here on Saturday. Modi is set to address a crowd of more than 50,000 Indian-Americans at Houston's NRG Stadium with President Donald Trump on Sunday.

"Petronet, India's largest LNG importer, will be able to deliver clean, low-cost and reliable natural gas to India from Driftwood. Increasing natural gas use will enable India, currently the sixth-largest buyer of US LNG, to fuel its impressive economic growth to achieve Prime Minister Modi's goal of a USD 5 trillion economy, while contributing to a cleaner environment," Tellurian said in a statement.

"It is an honour to sign the MoU with Petronet in the presence of Prime Minister Narendra Modi. At Tellurian, we look forward to a long and prosperous partnership with Petronet in the Driftwood project," Tellurian's president and CEO Meg Gentle said.

Petronet will spend USD 2.5 billion for an 18 per cent equity stake in the Driftwood LNG terminal - the largest outside holding so far in the project - and negotiate the purchase of 5 million tons of gas per annum, Gentle said.

US natural gas company Tellurian Inc. and Petronet LNG Limited (PLL) of India have signed an MoU, under which PLL and its affiliates intend to import up to five million tonnes per annum (5 mtpa) of liquefied natural gas (LNG) from America, the two companies announced on Saturday.

Tellurian and Petronet will endeavour to finalise the transaction agreements by March 31, 2020, they added.

The Driftwood project includes natural gas production, gathering, processing and transportation facilities, along with Driftwood LNG, a proposed 27.6 mtpa liquefaction export facility that will be located near Lake Charles, Louisiana on the US Gulf Coast.

In April, the US Federal Energy Regulatory Commission (FERC) issued the order granting authorisation for Driftwood LNG and the 96-mile Driftwood Pipeline, which will inter-connect the LNG terminal to the US natural gas market.

Under the MoU, Petronet and its affiliates intend to negotiate the purchase of up to 5 mtpa of LNG from Driftwood, concurrent with its equity investment, which remains subject to further due diligence and approval of its board of directors.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel