Tellurian, Petronet sign Driftwood equity investment agreement

Tellurian Inc. and Petronet LNG Ltd. India signed a $7.5-billion memorandum of understanding wherein Petronet and its affiliates intend to negotiate the purchase of as much as 5 million tonnes/year of LNG from the Driftwood project.

Petronet looks to spend $2.5 billion for an 18% equity stake in the project. A $5-billion debt commitment comprises the remainder, said Tellurian Chief Executive Officer Meg Gentle. The companies will work to finalize the transaction agreements by Mar. 31, 2020.

Signing of the MOU coincided with the visit of Prime Minister Narendra Modi to Houston and public event with US President Donald Trump. Driftwood plans to start construction in 2020 with first LNG by 2023.

The Driftwood LNG project consists of two main components: the construction and operation of the LNG facility, which includes five LNG plant facilities to liquefy natural gas, three tanks to store the LNG, LNG carrier loading and berthing facilities, and other appurtenant facilities at a site near Carlyss, Calcasieu Parish, La.; and the construction and operation of about 96 miles of pipeline, three compressor stations, and 15 meter stations. In April, the US Federal Energy Regulatory Commission granted authorization for Driftwood LNG and the 96-mile Driftwood Pipeline, which will interconnect the LNG terminal to the US gas market (OGJ Online, Apr. 18, 2019).