Petronet LNG on Sunday evening at a regulatory filing said it had signed up a”non-binding” MoU with Tellurian in Houston, USA. “The approach is subject to due diligence and acceptance of various Board of Managers,” it had said.
The Petronet LNG Board had only six months ago disfavoured $2.5 Billion deal to purchase 18 percent stake in US company Tellurian Inc suggested Driftwood LNG terminal, also import 5 million tonnes of LNG per year out of it for 40 years since the gasoline was available in a lot and no more required equity holdings, sources said.
Petronet on September 21 signed a Memorandum of Understanding (MoU) with Tellurian”wherein Petronet and its affiliates plan to sue the purchase up to five million tonnes per annum (5 mtpa) of liquefied natural gas (LNG) from Driftwood, concurrent with its own equity investment, which remains subject to additional due diligence and approval of its board of directors,” according to a joint announcement.
The Indian company Sunday evening at a regulatory filing said it had signed up a”non-binding” MoU with Tellurian in Houston, USA. “The approach is subject to due diligence and acceptance of various Board of Managers,” it had said.
Officials Privy to board deliberations stated the problem was discussed in the corporation’s board meeting in April/May and associates believed that the corporation shouldn’t proceed with the deal because of changing international gas market dynamics, in which the gas is offered in abundance at rock bottom rates.
Locking imports for 40 Decades together with a equity Investment at the LNG terminal wasn’t favoured, they said, including Petronet’s promoters, such as state-owned gas utility GAIL India Ltd, refiner Indian Oil Corp (IOC) and Oil and Natural Gas Corp (ONGC), were against the offer.
Business managing director and CEO Prabhat Singh neither replied calls and replied to text messages sent for remarks.
Peronei Is a company promoted by GAIL, IOC, ONGC and Bharat Petroleum Corp Ltd (BPCL), and Secretary to Ministry of Petroleum and Natural Gas, Government of India, is its chairman.
The officials said the deal with Tellurian is far from closed and will need discussions.
The deal goes through when the authorities was to push it, they included.
If Concludedthis could be the very first long-term LNG import contract signed because the Narendra Modi government came into power at 2014. Each of the preceding bargains – 7.5 million tonnes with Qatar, 1.44 million tonnes with Australia, 2.5 million together with Russia and 5.8 million tonnes using the US – were signed throughout the Congress-led UPA regime.
Petronet had signed a wider arrangement in February.
The Sources said India is considering reopening prices of previously entered LNG import prices with the US and Petronet plank had the vast majority opinion that locking in amounts and cost for 40 years wasn’t a fantastic alternative at this time period.
Petronet signed the MoU on sidelines of Prime Minister Narendra Modi’s trip to Houston.
GAIL had in 2011 signed a 20-year bargain to purchase 5.8 million tonnes annually of US LNG, divide between Dominion Energy Inc’s Cove Point plant and Cheniere Energy Inc’s Sabine Pass facility in Louisiana.
That Offer Costs of LNG have been at 115 percent of existing Henry Hub cost of gasoline and $5.05 per million British thermal unit. The landed cost in India comes to $9-10 per mmBtu from LNG being accessible the place or present market for USD 5-6.
GAIL needs to renegotiate the 2011 Sales and purchase agreement (SPA) with Cheniere Energy for import of 3.5 million tonnes of LNG annually, using annual fixed prices of $548 million and a period of 20 decades.
Apart from the 3.5 million tonnes each Annum of LNG from Houston-based Cheniere, GAIL has reserved 2.3 million tonnes a year capacity at Dominion’s Cove Point liquefaction centre.
In The announcement, Tellurian and Petronet had said that they will endeavour to finalise the trade agreements by March 31, 2022. Petronet’s regulatory filing, but didn’t mention of the deadline.
Tellurium Is investing $28 billion in assembling a 27.6 mtpa liquefaction export centre near Lake Charles, Louisiana on the US Gulf Coast.
In April, the US Federal Energy Regulatory Commission (FERC) issued the Order granting authorisation for Driftwood LNG along with the 96-mile Driftwood Pipeline, that will inter-connect the LNG terminal into the US organic Gas marketplace.