Indian liquid natural gas company Petronet has signed an agreement with Texas-based Tellurian to acquire an 18% equity stake in its proposed Driftwood LNG facility in Louisiana.
The agreement is valued at $7.5bn, with $2.5bn of that going towards the equity stake. Tellurian has also signed a memorandum of understanding (MoU) with Petronet for the sale of five million tonnes of LNG per year from Driftwood.
The MoU was signed in Houston on 21 September in the presence of Indian Prime Minister Narendra Modi, who tweeted: “It is impossible to come to Houston and not talk energy!
“Had a wonderful interaction with leading energy sector CEOs. We discussed methods to harness opportunities in the energy sector. I also witnessed the signing of MoU between Tellurian and Petronet LNG.”
It is impossible to come to Houston and not talk energy!
Had a wonderful interaction with leading energy sector CEOs. We discussed methods to harness opportunities in the energy sector.
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By GlobalDataAlso witnessed the signing of MoU between Tellurian and Petronet LNG. pic.twitter.com/COEGYupCEt
— Narendra Modi (@narendramodi) September 22, 2019
Once the MoU has undergone due diligence and received approval from Tellurian’s board of directors, the companies expect to complete the deal by 31 March 2020.
Tellurian CEO Meg Gentle said: “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 to achieve Prime Minister Modi’s goal of a $5tn economy while contributing to a cleaner environment.
“It is an honour to sign the MoU with Petronet in the presence of PM Modi. At Tellurian, we look forward to a long and prosperous partnership with Petronet in the Driftwood project.”
The deal was welcomed by US President Donald Trump at the Howdy Modi Community Summit in front of 50,000 people at the NRG Stadium in Houston.
Speaking alongside PM Modi, Trump said: “Yesterday we were thrilled to hear about the Petronet pledge to purchase up to five million tonnes of LNG per year from the US which could lead to billions of dollars of LNG exports to India in the coming years, and we have plenty of it.”
Tellurian thanked the two leaders, tweeting: “Tellurian is ready to partner Petronet to provide US LNG to India. Thank you President Trump and PM Modi.”
@TellurianLNG ready to partner with @PetronetLNGLtd to provide #USLNG to India @howdymodi Thank you @realDonaldTrump 🇺🇸 and @narendramodi 🇮🇳 pic.twitter.com/kqRV7jnKYc
— Tellurian (@TellurianLNG) September 22, 2019
Shares in Tellurian have risen slightly from $8.58 to $8.68 a share on the NASDAQ, a growth of over 1% and the company’s market capitalisation is $2.1bn. This is above the $7.11 a share at the start of 2019 but down on its peak share price of $11.24 on 27 March.