Houston-based Tellurian Inc., which has a natural gas export project tied to Lower 48 pipelines on the drawing board, said it has a memorandum of understanding (MOU) with India’s Petronet LNG Ltd. India (PLL) for a potential investment.
The MOU could lead to an investment in the Driftwood liquefied natural gas (LNG) project in Louisiana, a proposed 27.6 million metric ton/year (mmty) export facility near Lake Charles, LA. PLL also may invest in the associated 96-mile pipeline proposed that would connect to the project if it is sanctioned.
“Petronet is India’s largest LNG importer, operating 20 mmty of receiving terminal capacity with an additional 2.5 mmty of capacity under construction at its Dahej expansion and a further 5 mmty proposed at Gangavaram,” Tellurian CEO Meg Gentle said. “We support Petronet’s vision to be a key energy provider to India and look forward to delivering clean, low-cost and reliable natural gas from Driftwood LNG.”
Driftwood LNG and Driftwood Pipeline have permits in hand and in January received a final environmental impact statement from the Federal Energy Regulatory Commission.
A final investment decision is expected before mid-year. Construction, if it were to move forward, is to begin shortly thereafter. If all goes according to plan, operations could begin in 2023.
Tellurian’s unique strategy centers around eliminating Henry Hub gas price volatility by owning the volumes. Proposed pipelines on the drawing table would move up to 4 Bcf/d to Driftwood from the Permian Basin in West Texas and from the Haynesville Shale in Louisiana.
In December, the Louisiana Board of Commerce and Industry approved a five-year property tax break for Driftwood under the state’s Industrial Tax Exemption program. The abatement is considered crucial to developing the export project and other assets in Louisiana, which include upstream production from the Haynesville and proposed pipelines, which together represent about $30 billion in investments in the state.