In indicators it could shelve the USD 2.5 billion Tellurian deal, Petronet LNG Ltd on Thursday mentioned it has no plans to put money into LNG tasks because the market is awash with cheaper gasoline. Petronet, India’s greatest fuel importer, had on September 21, 2019, signed a Memorandum of Understanding (MoU) for the acquisition of as much as 5 million tonnes every year of liquefied pure fuel (LNG) from Tellurian Inc’s proposed Driftwood LNG terminal for 40 years.
The deal was concurrent with Petronet making an fairness funding of USD 2.5 billion for an 18 per cent stake in Driftwood. The September MoU contemplated the conclusion of the transaction by March 31, 2020, however the timeline was prolonged twice, the newest until December-end.
Within the post-second-quarter earnings name, Petronet Director-Finance V Okay Mishra mentioned the Tellurian deal is non-binding and “there isn’t any obligation on both get together”. “LNG is obtainable at a throwaway worth and so there seems to be no must put money into liquefication terminals,” he mentioned.
The MoU with Tellurian envisages exploring choices for a deal, which thus far hasn’t occurred, he mentioned, including the deal was to safe LNG at cheaper charges. However with the gasoline being obtainable in abundance at a throwaway worth, there seems to be no want for funding, he mentioned. “It’s not profitable to take a position.” There is no such thing as a progress on the MoU with Tellurian, he mentioned, including the market is subdued and LNG is definitely obtainable.
Mishra mentioned the corporate, which operates two LNG import services at Dahej in Gujarat and Kochi in Kerala, is constant to debate a brand new long-term LNG contract linked to identify or present costs. Petronet can be increasing Dahej terminal capability to 19.5 million tonnes every year from the present 17.5 million tonnes by including further storage tanks, he mentioned.
The agency is awaiting closing approval from Sri Lankan authorities to construct a floating LNG terminal within the island nation for about USD 300 million. US power upstart Tellurian had did not qualify in a young for provide of competitively priced fuel.
Hoping the repeat his success at Cheniere Vitality — the US liquefied pure fuel pioneer — power tycoon Charif Souki launched Tellurian 4 years in the past, however the 27.6 million tonnes every year (mtpa) plant, costing USD 30 billion, stays unbuilt years after building was as a consequence of start. The LNG market has been pummelled because the coronavirus pandemic has sapped demand.
Tellurian would have been the primary long-term LNG import contract signed because the Narendra Modi authorities got here to energy in 2014. All of the earlier offers — 7.5 mtpa with Qatar, 1.44 mtpa with Australia, 2.5 mtpa with Russia and 5.8 mtpa with the US — had been signed in the course of the Congress-led UPA regime.