Petronet LNG has distanced itself from an investment in Tellurian Inc’s proposed Driftwood LNG terminal.

Speaking to reporters a day after announcing the quarterly results, Petronet LNG’s Director (Finance), Vinod Kumar Mishra, said that Liquefied Natural Gas (LNG) is available cheap and going in for an investment is not lucrative right now.

“Regarding Tellurian I have always clarified, people are more preoccupied with that agreement. I want to clarify again that this is a non-binding agreement, and there is no obligation on either of the parties to do anything. This is just an agreement to explore the possibilities of any deal, which so far has not emerged,” he said.

In September 2019, Petronet LNG had signed an Memorandum of Understanding (MoU) to purchase up to 5 million tonnes per annum of LNG from Tellurian Inc’s proposed Driftwood LNG terminal for 40 years. The agreement also said that Petronet LNG and Tellurian would consider an investment of $2.5 billion for an 18 per cent stake in the Driftwood LNG terminal.

The initial timeline for agreement aimed to conclude the transaction by March 31. This timeline was later extended till December-end.

“Right now, a lot of cheaper LNG is available with us, without any investment, so why should we at all go for an investment. This is the question,” said Mishra.

“A lot of LNG is (now) available in the market at a very throwaway price. So, the concept of investment in a terminal was initially there because we are not getting very competitive rates of LNG,” he said.

Cheaper LNG

According to Mishra, the thought of going for an investment in liquefaction terminals was because Petronet LNG could get cheaper LNG.“People are ready to invest in liquefaction terminals without a long-term contract on their balance sheet…There is no need as of now to go for investment. We had done that agreement, (but) so far there is no progress in that agreement,” he added.