India’s Petronet LNG Ltd has shelved its $2.5 billion investment plan in Tellurian’s proposed Driftwood LNG terminal in Louisiana.
Petronet CEO Akshay Kumar Singh said last week Tellurian had made no request to extend a memorandum of understanding signed in September of 2019. The deal was for Petronet, India’s largest LNG importer, to purchase up to 5 million tons per year of LNG from the pending export terminal in Lake Charles.
Petronet supplies around 40% of the gas consumption in India and operates two regasification terminals at Dahej, Gujarat, and Kochi, Kerala.
Signs of problems with the MOU emerged in February during President Donald Trump’s visit to India. Tellurian, too, had a team on the ground in hopes of finalizing the supply deal by the end of March. Soon after that, Tellurian said it had extended its Memorandum of Understanding with Petronet to May 31 to allow additional time for Petronet’s consultative review process. Media reports indicated Petronet was searching for competing deals. The deal expired without an agreement in place.
In the past few weeks, Tellurian has finalized LNG sales-and-purchase agreements with energy traders Vitol and Gunvor. Each deal is worth about $12 billion in revenue over the contract period. Driftwood LNG is a proposed 27.6-mtpa LNG production and export terminal on the west bank of the Calcasieu River, south of Lake Charles.
In April 2019, the U.S. Federal Energy Regulatory Commission authorized the export facility, as well as an associated Driftwood pipeline, a 96-mile proposed pipeline connecting to the facility. Tellurian recently tested support for the pipeline.
