India's Liquefied Natural Gas (LNG) importer Petronet has decided to invest $2.5 billion in US LNG developer Tellurian Inc., in an agreement that will allow Indian counterpart to import up to five million tonnes per annum (5 mtpa) of LNG a year. According to experts, this would be one of the largest foreign investments in the United States to ship shale gas abroad.
The agreement was signed in the presence of Prime Minister Narendra Modi, who met CEOs from the energy sector on the first day of his week-long US visit on Saturday.
Tellurian and Petronet LNG India have jointly announced that the two companies have signed a Memorandum of Understanding (MOU) for up to five million tonnes per annum (5 mtpa) of LNG through equity investment in Driftwood.
"Tellurian Inc. and Petronet LNG of India have signed an MoU, wherein 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," Tellurian said in a statement on Saturday.
The two companies will finalise the transaction agreements by 31 March, 2020. 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.
Commenting on the development, Tellurian President and CEO Meg Gentle said, "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 to fuel its impressive economic growth to achieve Prime Minister Modi's goal of a $5 trillion economy while contributing to a cleaner environment... At Tellurian, we look forward to a long and prosperous partnership with Petronet in the Driftwood project."
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.
Edited by Chitranjan Kumar