Petronet LNG to sign $2.5 B U.S. gas deal

India’s top gas importer Petronet LNG and U.S. liquefied natural gas (LNG) developer Tellurian Inc are preparing to sign a $2.5 billion deal during President Donald Trump’s maiden visit to New Delhi later this month, two sources familiar with the matter said.

India and the United States have built close political and security ties and want to strengthen trade links, with Trump aiming to boost energy supplies to India, the world’s third biggest oil importer.

Petronet will invest the money over a five-year period in Tellurian’s proposed $27.5 billion Driftwood LNG export project in Louisiana and the deal will give Petronet an equity stake in the project and rights for up to 5 million tons a year of LNG, the sources said.

“Supplies will begin from 2024 and will be gradually raised to 5 million tons a year in 2028,” one of the sources said.

“India will be getting the producer-based prices unlike other deals where Indian companies are only one of the customers,” the source said, declining to be named.

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 tons of LNG a year.

Tellurian did not respond to Reuters email seeking comment. Petronet was not avaialable for comment.

The two companies signed a preliminary non-binding deal in September last year, when Prime Minister Narendra Modi visited the United States as the two nations want to deepen their energy and trade relations.

The South Asian country is expanding its pipeline network and building new LNG import terminals to encourage the use of cleaner fuel.

In a bid to make gas more affordable, it has asked its biggest gas supplier Qatar to change the pricing under its long term oil-linked gas supply contracts as spot Asian LNG prices have tumbled. (Reporting by Nidhi Verma; Editing by Christian Schmollinger and Richard Pullin)

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