Tellurian Signs $2.5 Billion LNG Deal with India’s Petronet
HOUSTON (P&GJ) — Tellurian Inc has signed a $2.5 billion investment deal with India’s Petronet for its Driftwood LNG project making it one of the largest foreign investments in a U.S. infrastructure project.
Petronet will spend $2.5 billion for an 18% equity stake in the $28 billion Driftwood LNG terminal -- the largest outside holding so far in the project -- and negotiate the purchase of 5 million tons of gas per year.
The Petronet deal will account for nearly one-fifth of the 27.6 million metric tons of liquefied natural gas that Driftwood LNG will make per year. Tellurian plans to build four pipelines that will move natural gas from the Permian Basin, Eagle Ford Shale and Haynesville Shale to the facility.
Bloomberg has reported an additional $5 billion in funding will come from a debt commitment, according to Tellurian Chief Executive Officer Meg Gentle, bringing the total amount of the deal to $7.5 billion. The companies said they would try to finalize the deal by March 31, 2020.
Tellurian board Chairman Charif Souki described the deal to the Houston Chronicle as one of the largest investments made by a foreign company into a U.S. infrastructure project. It tied for the largest LNG supply deal in U.S. history in terms of volume.
Although financial terms were not disclosed, San Diego utility company Sempra Energy signed a 20-year deal in May for the company’s proposed Port Arthur LNG export terminal in Southeast Texas to provide Saudi Aramco with 5 million metric tons of LNG per year.
Gentle said that with the Petronet deal, the Driftwood project is now two-thirds subscribed and expects to begin construction soon after the final documents are signed early next year. Although she did not give names, Gentle did say the company does have an idea of who the remaining partners in the project might be.
She confirmed that Driftwood is expected to begin first shipments in 2023.
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