Tellurian snags another major Driftwood customer

(iStock) Calcasieu Parish

Tellurian’s Driftwood project in Lake Charles reeled in another big customer: Petronet, India’s largest LNG importer.

The companies announced Monday they have signed a Memorandum of Understanding for Petronet to purchase up to 5 million tons per year of LNG from the pending Driftwood LNG export terminal. The two companies plan to finalize the agreements by March 2020.

Tellurian plans to make an investment decision on Driftwood before year’s end, with construction set to begin in 2020 and the first LNG expected in 2023. Federal regulators authorized the export terminal and the associated 96-mile Driftwood Pipeline connecting to the export project in April.

Tellurian and Petronet inked a similar deal earlier this year for a potential equity investment in both terminal and the pipeline. The facility will be capable of producing a proposed 27.6 million tons per year. At full capacity, Driftwood will be capable of exporting approximately 4 billion cubic feet per day of natural gas.

Petronet supplies around 40% of the gas consumption in India and operates two regasification terminals at Dahej, Gujarat, and Kochi, Kerala.

Subsidiaries of Total S.A. have agreed to purchase 1 million tons per year of liquefied natural gas from Driftwood. As part of the deal, the France-based multinational will invest $500 million in Driftwood Holdings LP.

In addition, Tellurian and Total Gas & Power entered into a definitive sales and purchase agreement for an additional 1.5 million tons per year of LNG from Tellurian’s LNG offtake volumes from Driftwood at a free on board at a price based on the Platts Japan Korea Marker. That company’s aggregate stake in Tellurian’s portfolio would hit $907 million at the time of the final investment decision.

Tellurian also secured an MOU with Vitol Inc. in December to supply 1.5 mmty of LNG for at least 15 years.

Read the announcement.