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Tellurian Signs $7.5-Billion Deal With India’s Petronet LNG

India’s Petronet LNG Ltd. signed a $7.5-billion agreement to buy into Tellurian Inc.’s proposed LNG terminal in Louisiana. Bloomberg described it as potentially “one of the largest foreign investments in the US to ship shale gas abroad.”

Petronet plans to buy an 18% equity stake in the $28-billion Driftwood LNG terminal for $2.5 billion and negotiate the purchase of 5 mtpa of gas. The remaining $5 billion of Petronet’s total investment will come from a debt commitment, according to Tellurian CEO Meg Gentle.

The companies plan to complete the accord by 31 March 2020. Tellurian aims to have signed up additional partners in order to proceed with the project. First LNG is expected in 2023.

Bloomberg quoted Gentle: “India is one of the fastest growth markets for LNG and should soon become the second-largest LNG importer.” It is currently the sixth-largest buyer of US LNG.

Tellurian cofounder Charif Souki said, “People should not be surprised this came. The United States and India have a significant issue diametrically opposed. We have too much gas that we don’t know what to do with and India needs greater gas, and 1 million tons a time is not going to solve the problem.”

Tellurian expects to finalize the last 4 million tons needed for Driftwood’s first phase with one or two partners in the coming months, Gentle said. Petronet’s share represents about $2 billion in annual fuel sales for the life of Driftwood, she said.

“It supports the drilling industry and the pipeline industry, and there is going to be an enormous amount of resources,” Souki said.

About Petronet LNG

  • Formed as a joint venture in 1998 by the government of India to import LNG and set up regasification terminals in the country
  • Publicly traded; 50% owned by India’s four major state-owned oil and gas enterprises
  • Supplies ~40% of the gas consumption in India; constructed and operates two regasification terminals at Dahej, Gujarat (India’s first LNG import terminal) and Kochi, Kerala 

 

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