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GLNG COMMENTARY GLNG
equity acquisition in Driftwood Holdings. stick with contracts – both sides – and we look
Tellurian and Petronet had envisioned for additional new contacts and volumes to com-
finalising the transaction by March 31, but ply with requirements from India.”
after executives from the US company visited Doha’s bargain position may have weakened
India in February the deadline was pushed enough that New Delhi may be willing to try
back to May 31. Tellurian spokesperson Joi again. Qatari gas cost an estimated $8.5-9 per
Lecznar said last week that while the agree- mmBtu ($235.11-248.94 per 1,000 cubic metres)
ment had lapsed, the company was still in talks when oil was $60-70 per barrel. The average spot
with Petronet and other possible offtakers for price for July delivery into East Asia, meanwhile,
the LNG terminal. was estimated at $2.10 per mmBtu ($58.09 per
The lapsing of the deal is anticipated to delay 1,000 cubic metres) on June 5.
an FID on the export project, given that Tellurian The IEA has said India and China’s expand-
has only managed to finalise one supply deal – ing gas consumption will help support a recov-
Total agreed in July 2019 to buy 1mn tpy as well ery in global demand in the coming years. India India has a
as a $500mn investment in Driftwood Holdings. is expected to close in on South Korea’s position
The Driftwood project includes gas produc- as the world’s third-largest importer of LNG by history of seeking
tion, gathering, processing and transportation 2023, while China will overtake Japan as the better supply
facilities, along with the 27.6mn tpy Driftwood global leader.
LNG export facility that will be located near Lake Singh told Platts that while the South Asian deals while the
Charles, Louisiana. giant’s gas demand had fallen from a pre-
COVID-19 high of 160mn cubic metres per day energy market
What next? to 110 mcm during the lockdown, it had already
India has a history of seeking better supply deals recovered to 145 mcm per day and it would not is experiencing
while the energy market is experiencing price be long before the lost ground had been regained. price pains.
pains. New Delhi managed to convince the He added that LNG imports, which shrank 40%
Qatari government in 2015 to halve the cost of to 1.5mn tonnes in May, would pick up over the
its long-term gas supplies. In exchange, India next six months.
agreed to raise its purchases from 7.5mn tpy to Given that Qatar is embarking on a major
8.5mn tpy. India then moved on to a successful expansion of its LNG export capacity and the
renegotiation of long-term supply contracts with demand outlook is plagued by uncertainty
Australia and Russia. – the biggest threat remains a second wave of
New Delhi tried in January to revisit its sup- COVID-19 infections – it would not be surpris-
ply deal with Qatar once more, but its efforts fell ing to hear in the coming months that Indian
flat, with Energy Minister Saad Sherida al-Kaabi buyers had indeed managed to secure more
saying: “We are not renegotiating contracts, we favourable term contracts.
P10 www. NEWSBASE .com Week 23 12•June•2020
