Petronet LNG signs USD 7.5 billion deal with Tellurian Inc

Petronet LNG signs USD 7.5 billion deal with Tellurian Inc

The state-run Petronet LNG signed an initial agreement with the U.S. liquefied natural gas developer Tellurian Inc. The deal was signed in Houston in the presence of PM Modi. Under the initial agreement the Indian company and its affiliates are to buy up to 5 million tonnes per annum of liquefied natural gas (LNG). The estimated cost of the agreement is $7.5 billion.

Highlights of agreement:

Under the agreement Petronet will be spending $2.5 billion for an 18% equity stake in the $28 billion Driftwood LNG terminal in exchange for the rights to 5 million metric tonnes of LNG per year over 40 years. It is the largest outside holding so far in the project. The agreement negotiates the purchase of 5 million tonnes of gas per annum.

India and UNFCCC:

Currently, India is the sixth-largest buyer of US LNG. The Indian companies have invested $4 billion in US shale gas assets to source crude oil and LNG from the US. After the US and China, India is the biggest emitter of greenhouse gases. As a part of its commitment to the United Nations Framework Convention on Climate Change (UNFCCC), India plans to reduce carbon emissions by 33-35% from its 2005 levels by 2030. One of the ways to achieve this is piped natural gas. Increasing natural gas will lead to a reduction in carbon emissions.

Petronet LNG:

Petronet LNG Limited is formed as a joint venture (JV) by Indian govt. that aims to import LNG and set up LNG terminals in the country.

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