India’s major gas importing company Petronet LNG has reportedly renewed a deal to gain more time to finalise investment in Tellurian’s Driftwood export project in Louisiana, US.
In September 2019, Tellurian and Petronet LNG signed a Memorandum of Understanding (MOU) for the LNG project.
Under the MoU, Petronet and its affiliates planned to negotiate the purchase of up to five million tonnes per annum (5 mtpa) of liquefied natural gas (LNG) from Driftwood, concurrent with its equity investment.
While signing the MoU, the two companies agreed to finalize the transaction agreements by 31 March 2020.
Under the renewed deal, Petronet and Tellurian will have until the end of December to finalize the deal, sources told Reuters.
The deal was renewed ahead of a virtual meeting between Indian oil minister Dharmendra Pradhan and US Energy Secretary Dan Brouillette on 17 July.
Tellurian was quoted by the publication as saying : “The long-term LNG fundamentals have not changed, just slowed by COVID-19. India continues to need a large amount of LNG and the U.S. continues to produce the lowest cost LNG, so it stands to reason Tellurian would continue to work with all LNG buyers in India.”
To promote the use of cleaner fuels, India is stepping up efforts for the expansion of its pipeline network and constructing LNG import terminals.
The Driftwood project includes natural gas production, gathering, processing, and transportation facilities.
It will also comprise Driftwood LNG, a proposed about 27.6 mtpa liquefaction export facility that will be located near Lake Charles, Louisiana on the US Gulf Coast.
In April last year, Driftwood LNG and the 96-mile Driftwood Pipeline, which will inter-connect the LNG terminal to the U.S. natural gas market, received approval from the US Federal Energy Regulatory Commission (FERC).