CHENNAI: Liquefied natural gas major Petronet LNG said on Monday that a non-binding agreement it had signed with US energy firm Tellurian, under which it was to invest $2.5 billion in the latter’s Louisiana LNG terminal project in exchange of 40 years of gas supplies, has lapsed.
The Memorandum of Understanding (MoU) had been signed during Prime Minister Narendra Modi’s visit to Houston, Texas, in 2019.
According to Petronet Managing Director & CEO A K Singh, Petronet has now opened discussions with alternate suppliers such as Qatar for natural gas supplies.
Petronet’s current long-term deal to import 7.5 million tonnes per annum of liquefied natural gas (LNG) from Qatar ends in March 2028, and the company has time till December 2023, to decide on extending it.
Singh was speaking to reporters during a video press conference on its FY21 performance.
Petronet recorded consolidated net sales of Rs 7,575.32 crore in the quarter ended March 2021, down 11.58 per cent from Rs 8,567.15 crore in March 2020. Quarterly net profit stood at Rs 637.92 crore, up 71 per cent from Rs 373.20 crore last year.
The MoU with Tellurian had envisioned an annual purchase of up to five million tonnes of LNG from the proposed Driftwood LNG terminal for 40 years. In parallel, Petronet was to make an equity investment of $2.5 billion for an 18 per cent stake in Driftwood.
However, “the MoU was not extended,” Singh said, without divulging further details. The transaction had initially been slated for completion in March 2020, but was first extended to May 31, 2020, and then to December 31, 2020.
“We did not get a request from their (Tellurian’s) side for an extension,” Singh said.
He also said that gas demand in India, severely impacted by lockdowns, is likely to bounce back this fiscal.