Petronet to buy stake in Tellurian’s Driftwood LNG export terminal

Petronet LNG Limited India and its affiliates will negotiate the purchase of up to five million tons per annum (5 mtpa) of liquefied natural gas (LNG) from Driftwood LNG export terminal following a memorandum of understanding (MOU) with Tellurian.

For the supply of 5 mtpa of LNG a year for more than 40 years, Petronet is expected to invest US$2.5 billion in Driftwood LNG export facility.

Petronet with a market capitalization of approximately $5.1 billion is a joint venture between the Government of India and the nation’s major oil and natural gas industry players to import LNG and develop LNG terminals in the country.

Owned by Tellurian, Driftwood LNG is developing a LNG production and export terminal on the west bank of the Calcasieu River, south of Lake Charles, Louisiana.

On completion, the Driftwood LNG export terminal will export approximately 27.6 mtpa of LNG per year to customers worldwide.

Driftwood LNG export terminal photo

Rendering of the Driftwood LNG export terminal in Louisiana. Graphic courtesy of Business Wire.

Meg Gentle – president and CEO of Tellurian, commenting on the deal for the Driftwood LNG export terminal, 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.

“It is an honor to sign the MOU with Petronet in the presence of H.E. Prime Minister Narendra Modi. At Tellurian, we look forward to a long and prosperous partnership with Petronet in the Driftwood project.”

In April, the US Federal Energy Regulatory Commission granted authorization to the Driftwood LNG export terminal and the 96-mile Driftwood Pipeline, which will inter-connect the LNG terminal to natural gas market of the country.

The equity investment of Petronet in the Driftwood LNG export facility is subject to further due diligence and approval of its board of directors.

Tellurian and Petronet will endeavor to finalize the transaction agreements pertaining to the Driftwood LNG export terminal by 31 March 2020.

In July 2019, Tellurian signed a similar agreement with certain subsidiaries of French oil and gas company Total to buy 1 mtpa from the Driftwood LNG export facility.