India-based LNG importer Petronet LNG has signed a memorandum of understanding (MOU) to reportedly invest $2.5bn (£2.01bn) in Tellurian’s Driftwood LNG project proposed to be built in Louisiana, US.

In return, Petronet LNG and its affiliates are expected to be entitled to receive up to five million tonnes per annum (mtpa) of liquefied natural gas (LNG) produced from the LNG project.

Petronet is a joint venture set up by the Indian government, and involves participation from some of the well-established oil and gas players in the country. The company developed India’s first LNG receiving and regasification terminal in Gujarat, and another terminal in Kerala.

The equity investment by the Indian company in the US LNG project will be subject to further due diligence and approval of its board of directors. Tellurian and Petronet will work towards finalising the transaction agreements by 31 March 2020.

Tellurian president and CEO Meg Gentle said: “Petronet, India’s largest LNG importer, will be able to deliver clean, low-cost, and reliable natural gas to India from Driftwood. Increasing natural gas use will enable India to fuel its impressive economic growth to achieve Prime Minister Modi’s goal of a $5 trillion economy while contributing to a cleaner environment.

“It is an honor to sign the MOU with Petronet in the presence of H.E. Prime Minister Narendra Modi. At Tellurian, we look forward to a long and prosperous partnership with Petronet in the Driftwood project.”

Driftwood LNG project details

The proposed LNG project to be built on the US Gulf Coast near Lake Charles has been designed to have a capacity of nearly 27.6mtpa. In addition to the liquefaction export facility, the project will have an associated 154km long Driftwood Pipeline and natural gas production, gathering, processing, and transportation facilities.

In April 2019, Tellurian secured authorisation for the Driftwood LNG project and the associated pipeline, which will inter-connect the export terminal to the US natural gas market.

In July 2019, Tellurian signed offtake agreements with French oil and gas Total’s subsidiaries – Total Delaware and Total Gas & Power North America for 1mtpa from the Driftwood LNG export project. Total agreed to invest $500m (£401.62m) in Driftwood Holdings, in return, which is the holding company of the project.