Doubts over Petronet’s Tellurian deal as firm eyes cheaper LNG

MUMBAI: Petronet LNG Ltd, India's biggest gas i mporter, said it i s looking to sec ure te rm LNG supplies at cheaper prices, than e xploring investments in liquefaction projects such as one by US energ y u pstart Tellurian Inc.

"We ar e exploring the market, but one thing is sure that investments as such are not looking lucrative a t this point of time," its CEO Pr abhat Singh said.

He was ask ed a bout the fate of the USD 2.5 billion T ellurian de al, which has al ready been extended twice.

Petronet had on Se ptember 21, 2019, signed a Memorandum of Understanding (M oU) for purchase of up to 5 million tonnes p er ann um of liquefied natural g as (LNG) fr om T ellurian Inc's proposed Driftwood LN G te rminal for 40 y ears. T he deal was concurrent with Petronet making an equity investment of USD 2.5 b illion f or an 18% stake in Driftwood.

"All the options are being explored," he said.

Refusing to di vulge details of discussions with Tellurian, he said, "we are exp loring the m arket." Term LNG supplies, he said, were a v a i lable at benchmarks close to spot or cur rent market price and Pe tronet was pursuing tha t option f or t he moment.

"If you are getting a molecule floating on the water which is very cheap, which we are getting at this point of time, then those ar e the options which are on top priority today and we ar e working around that," he said.

Petronet is e valuating offers f or the 1 mil lion tonnes per annum LNG deal for 10 years that will be indexed to a spot benchmark.

With question s being raised a bout P etronet locking large volumes from one supplier for a 40- year period at a time when global rates were falling due to glut in the market, the company had invited bids to buy 1 million tonnes per annum of LNG f or 1 0 years.