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On Saturday, Tellurian, a Houston-based energy major and PLL signed a MOU under which PLL and its affiliates will import for up to 5 million tonne of LNG from America over a 40 year period. The agreement also includes PLL making investment in the equity of Driftwood project to secure the LNG.As per a corporate presentation by Tellurian's, $500 million investment is required to secure 1 million tonne per annum of LNG from Driftwood. Going by this figure, PLL will have to invest close to $2.5 under the deal.Tellurian is offering an equity interest in Driftwood Holdings, which comprises Tellurian's upstream company, its pipeline and the upcoming terminal that will be able to export 27.6 million tonne of LNG a year.Both companies could not immediately be reached for comments.Tellurian is selling 51 per cent holding in Driftwood to third parties while it itself would retain 49 per cent stake or control over 13.6 mtpa of LNG. A 5 mtpa interest of PLL will work out to about 20 per cent stake in the US project. Tellurian expects to generate $8 per share cash flow from the project. The stake could be higher if further agreement is reached to increase PLL's share of LNG beyond 5 mtpa.The deal will benefit India as it will allow it to get access to cheap LNG expected to flow from Driftwood. The Driftwood project expected to deliver LNG on the water at less than $ 3 per mmBtu which even after including freight, insurance would be cheaper for India.PLL will get its share of 5 mtpa from the first phase of the Driftwood project itself that involves total LNG production of 16.6 mtpa. The Driftwood capacity is proposed to be raised further to 27.6 mtpa later.Global energy giant Total has already committed to invest in Driftwood first phase to secure 1 mtpa of LNG.Petronet and Tellurian had first signed a broader agreement in February which did not specify investment numbers or offtake volumes.The announcement on the deal came after Prime Minister Narendra Modi had a meeting with the CEOs of top oil companies based in the US on September 21.A statement from Tellurian said the Memorandum of Understanding (MoU) was signed in PM Modi's presence."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 Modis goal of a $5 trillion economy while contributing to a cleaner environment," Tellurian's President and CEO Meg Gentle said in a statement.India is expanding its pipeline network and building new LNG import terminals to encourage the use of cleaner fuel.Modi has set a target to raise the share of natural gas in India's overall energy mix to 15 per cent in the next few years from about 6.5 per cent now.The deal on LNG is subject to further negotiations. Tellurian and Petronet will endeavor to finalize the transaction agreements by 31 March 2020.Petronet LNG is the largest importer of LNG in India with a market capitalization of approximately $ 5.1 billion. Petronet developed the country's first LNG receiving and regasification terminal at Dahej, Gujarat (17.5 mtpa), and another terminal at Kochi, Kerala (5 mtpa).PM Narendra Modi's meeting with energy sector CEOs was scheduled as the first event of his weeklong US visit. The meeting focused on working together for energy security and expanding mutual investment opportunities between India and the United State.(Subhash Narayan can be contacted at subhash.n@.in)( With inputs from IANS )

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