(Adds details, confirmation)
By Nidhi Verma
NEW DELHI, Feb 14 (Reuters) - Indian gas importer Petronet LNG on Thursday signed an initial agreement with Tellurian Inc to invest in its proposed Driftwood project in Louisiana in the United States and buy liquefied natural gas (LNG), Tellurian said in a statement.
The deal, reached during a high level U.S.-India commercial dialogue to advance trade and investment, will represent Petronet’s first U.S. investment if it works out.
Amos Hochstein, Senior Vice President in Tellurian Inc, signed the memorandum of understanding with a Petronet LNG official via a video link in the presence of Prabhat Singh, managing director of the Indian company.
Hochstein was part of the delegation that was meant to accompany U.S. Commerce Secretary Wilbur Ross but the trip was cancelled due to bad weather in the United States.
India is expanding its pipeline network and building new LNG import terminals to boost its use of the cleaner fuel.
Prime Minister Narendra Modi has set a target to raise the share of natural gas in India’s overall energy mix to 15 percent in the next few years from about 6.5 percent.
President and CEO of Tellurian Meg Gentle said: “We support Petronet’s vision to be a key energy provider to India and look forward to delivering clean, low-cost and reliable natural gas from Driftwood LNG.”
Tellurian is offering an equity interest in Driftwood Holdings, which comprises Tellurian’s upstream company, its pipeline and the upcoming terminal that will be able to export 27.6 million tonnes of LNG a year.
A $500 million investment in Driftwood would give the stakeholder rights over a one million tonne/year of LNG over the life of the project, according to a presentation by Tellurian posted on the U.S. company’s website.
Tellurian hopes to begin production in 2023.
Petronet operates a 15 million tonne per annum (mtpa) LNG terminal in western Gujarat state. It is expanding its Dahej terminal by 2.5 mtpa. It also operates a 5 mtpa terminal at Kochi in southern Kerala state.
Reporting by Nidhi Verma; Editing by Sanjeev Miglani and David Evans