HOUSTON – U.S. natural gas company Tellurian and India's largest LNG importer Petronet LNG Ltd have signed an MoU under which the latter and its affiliates will import up to 5 million tons of LNG from America.
The deal signed Sept. 21 will also include PLL's equity investment in Tellurian's Driftwood project after further negotiations on the terms and size of the equity deal. The Driftwood project includes natural gas production, gathering, processing, and transportation facilities, along with a proposed 27.6 mtpa liquefaction export facility.
The announcement came after Prime Minister Narendra Modi had a meeting with the CEOs of top oil companies based in the U.S. Saturday.
A statement from Tellurian said the Memorandum of Understanding was signed in Modi's presence.
"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," Tellurian's president and CEO Meg Gentle said in a statement.
"It is an honor to sign the MOU with Petronet in the presence of Modi. At Tellurian, we look forward to a long and prosperous partnership with Petronet in the Driftwood project," she added.
The deal on LNG is subject to further negotiations. Tellurian and Petronet will endeavor to finalize the transaction agreements by March 31, 2020.
Petronet is the largest importer of LNG in India with a market capitalization of approximately $5.1 billion. Petronet developed the country's first LNG receiving and regasification terminal at Dahej, Gujarat (17.5 mtpa), and another terminal at Kochi, Kerala (5 mtpa).
Modi's meeting with energy sector CEOs was scheduled as the first event of his week-long U.S. visit. The meeting focused on working together for energy security and expanding mutual investment opportunities between India and the U.S.
"Getting straight to business. PM @narendramodi just concluded a fruitful interaction with top energy sector CEOs at a Roundtable meeting in #Houston. Discussion focussed on working together for energy security and expanding mutual investment opportunities between India and US," External Affairs Ministry spokesman Raveesh Kumar said in a tweet after the meeting.
"Further energising India-US friendship. Among the first engagements of PM @narendramodi in Houston is a meeting with CEOs from the energy sector. India and the US are looking to diversify cooperation in this sector," the Prime Minister's Office also posted on Twitter.
CEOs of 16 leading American companies were said to be attending the roundtable, including Baker Hughes, BP, Cheniere Energy, Dominion Energy, Emerson Electric Company, ExxonMobil, Perot Group and Hillwood, IHS Markit, LyondellBasell Industries, McDermott, Schlumberger, Tellurian, Total, Air Products, Vinmar International and Westlake Chemicals.
Prior to the meeting, Modi first posed for photos with the oil sector CEOs. U.S. Ambassador to India Kenneth Juster was also present.
Houston is known as the United States oil and gas capital. India and the U.S. had last year inked the US-India Strategic Energy Partnership to enhance collaboration in energy cooperation.
The U.S. began selling crude oil to India in 2017, and is becoming a major source. Supplies from the U.S. jumped more than four-fold to 6.4 million tons in the 2018-19 fiscal year. In 2017-18, the first year of imports from the U.S., the supplies were at 1.4 million tons.
Indian Ambassador Harsh Vardhan Shringla has said earlier: "Our cooperation with the U.S. in the energy sector has increased significantly because of interest in the US' shale oil and LNG sector. We are also looking for technologies for the Indian energy companies. The PM would be meeting some of the top companies in the energy sector, and most are headquartered in Houston."