Tellurian, Petronet MoU Expires
The memorandum of understanding (MoU) between Indian Petronet LNG and US developer Tellurian regarding the finalisation of the deal in which the former will pick up an equity stake in the Driftwood LNG export project seems to have expired.
The MoU, signed in September last year, was supposed to be finalised by March 31 but the deadline was extended till May 31. As of June 2, there was no update from Petronet about the status of the deal but Tellurian offered a vague statement. It told NGW via email: "India is investing over $100bn in energy infrastructure and LNG demand continues to grow. We continue to have conversations with multiple potential partners. Companies are focused on their immediate energy needs and will return to a long term planning after recovery from Covid-19."
Tellurian signed the MoU with Petronet to negotiate the supply of up to 5mn metric tons/year of LNG from Driftwood project. As per the MoU, Petronet LNG, India's biggest LNG importer, was also to pick up an equity stake in the project.
India’s LNG demand has dropped sharply with the lockdown in place. On March 25, India announced the lockdown to control the spread of Covid-19. This has impacted gas demand and major LNG importers had to issue force majeure notices.
After rising by a whopping 68% yr/yr in February and 20% yr/yr in March, India’s LNG imports in April witnessed a steep yr/yr decline. India’s LNG imports last month were 1.95bn m3 (about 1.4mn metric tons), down 29.4% compared with the corresponding month of the previous year, according to the data published by the Indian oil and gas ministry's Petroleum Planning and Analysis Cell on May 27.
On June 2, Wood Mackenzie said it expects India’s LNG demand to decline 24% yr/yr to 4mn mt in Q2 2020.