SAUDI STRIKES EFFECT: PETROL PRICES JUMP ₹1.59/LTR, DIESEL ₹1.31 IN 6 DAYS
GAS PACT Petronet acquires an 18% stake in the $28 bn Driftwood LNG terminal
Petrol prices have soared by ₹1.59 a litre and diesel by ₹1.31 in the last six days—the most since daily price revision was introduced in 2017, as a massive strike at Saudi Arabian oil facilities jolted oil markets. Petrol price was on Sunday hiked by 27 paise to ₹73.62 a litre in the Delhi market, the benchmark for national rates.
NEW DELHI: Tellurian Inc. has signed a $7.5 billion agreement for India’s Petronet LNG Ltd to buy a stake in its proposed liquefied natural gas (LNG) terminal in Louisiana, in what could potentially be one of the largest foreign investments in the US for shipping shale gas abroad.
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 tonnes of gas per annum. The remainder of the total will come from debt, Tellurian chief executive officer (CEO) Meg Gentle said.
The companies plan to complete the agreement by March 31, by which time Tellurian hopes to have signed up partners to enable it to proceed with the project.
“We will sign the document sometime in the first quarter and we will have financing ready to close simultaneously, and then we will begin construction,” Gentle said in a telephone interview. “India is one of the fastest growth markets for LNG and should soon become the secondlargest LNG importer,” she said.
The deal, signed in Houston in the presence of Prime Minister Narendra Modi, underscores a record year for the LNG industry, with tens of billions of dollars worth of export projects given the green light. The surge of new supply from the US’ trove of shale gas has rendered the once-premium fuel accessible for emerging markets such as India, currently the sixth-largest buyer of US LNG.
“People should not be surprised this came,” said Tellurian co-founder Charif Souki, who also founded America’s largest LNG exporter Cheniere Energy Inc. “The United States and India
THE TELLURIAN AND PETRONET DEAL COULD POTENTIALLY BE ONE OF THE LARGEST FOREIGN INVESTMENTS IN THE US FOR SHIPPING SHALE GAS ABROAD
have a significant issue diametrically opposed. We have too much gas that we don’t know what to do with and India needs greater gas, and 1 million tons a time is not going to solve the problem.”
The pact was signed on the sidelines of Modi’s meeting with top executives of US energy majors in Houston.
In his first engagement during his week-long visit to the US, Modi met 17 CEOS of US energy companies such as Tellurian Inc., Exxonmobil, BP Plc, Cheniere Energy, Dominion Energy, and Total SA.
He was accompanied by petroleum secretary MM Kutty, external affairs minister S Jaishankar, foreign secretary Vijay Gokhale, and India’s ambassador to the US Harsh Vardhan Shringla.
India has been sourcing LNG and crude oil from the US, with Indian companies investing $4 billion in US shale gas assets.
“Petronet will invest $2.5 billion in Tellurian’s proposed Driftwood LNG export terminal, in exchange for the rights to 5 million metric tonnes of LNG per year over 40 years,” said Raveesh Kumar, external affairs ministry spokesperson.
India, the biggest emitter of greenhouse gases after the US and China, has been pushing for a gas-based economy and plans to connect 10 million households to piped natural gas by 2020. It plans to reduce its carbon emissions by 33-35% from its 2005 levels by 2030, as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in 2015.
In a tweet, PM Modi said, “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. Also witnessed the signing of MOU between Tellurian and Petronet LNG.”
“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,” said Gentle.