Photo: Gene McMahon | Miracle Films Photo: Office Of The Prime Minister Of India Photo: Office Of The Prime Minister Of India Photo: Melissa Phillip, Staff / Houston Chronicle Photo: Brett Coomer, Houston Chronicle / Staff Photographer Photo: SAM PANTHAKY, Contributor / AFP/Getty Images Photo: Jordan Blum / Houston Chronicle Photo: Gene McMahon | Miracle Films

A visit to Houston by Indian Prime Minister Narendra Modi has become the backdrop for one of the largest liquefied natural gas supply deals in U.S. history.

Executives with Houston liquefied natural gas company Tellurian and India’s Petronet LNG signed a $2.5 billion deal in Modi’s presence during a private Saturday evening ceremony at the Post Oak Hotel at Uptown in Houston's Galleria district.

Under the deal, Petronet pledged to invest $2.5 billion in Tellurian’s proposed Driftwood LNG export terminal in Lake Charles, La., in exchange for the rights to 5 million metric tons of LNG per year over the lifespan of the project.

In an exclusive interview with the Houston Chronicle, Tellurian board Chairman Charif Souki called the deal a “win-win-win” for the United States, India and the company.

“It’s a win for the United States because it creates an outlet for our surplus gas,” Souki said. “It’s a win for India because they have secured cheap gas for a long period of time. And it’s a win for Tellurian because we have provided a bridge between a nation with too much gas and a nation that needs as much gas as it can get as an affordable price.”

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The signing ceremony took place a day before the Indian prime minister was set to appear at a rally with President Donald Trump at NRG Stadium. The two leaders are expected to speak about wider cooperation between the two nations. Tellurian is one of three corporate sponsors of the event.

With India getting more than half of its electricity from coal, Modi set a goal to have natural gas make up 15 percent of India’s power generation energy mix by 2030. As a result, Petronet and other companies are building new LNG import terminals and expanding the number of natural gas pipelines to encourage wider use of the cleaner-burning fuel.

“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,” Tellurian CEO Meg Gentle said in a statement.

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Souki described the deal with Petronet as one of the largest investments made by a foreign company into a U.S. infrastructure project. It tied for the largest LNG supply deal in U.S. history in terms of volume.

Financial terms were not disclosed, but San Diego utility company Sempra Energy signed a 20-year deal in May for the company’s proposed Port Arthur LNG export terminal in Southeast Texas to provide Saudi Aramco with 5 million metric tons of LNG per year.

Most supply deals in the U.S. LNG industry are done by utility companies signing a long-term purchase agreements with producers, but the deal between Tellurian and Petronet allows the Indian company to be both a customers and an investor.

The Petronet deal will account for nearly one-fifth of the 27.6 million metric tons of liquefied natural gas that Driftwood LNG will make per year. Tellurian plans to build four pipelines that will move natural gas from the Permian Basin, Eagle Ford Shale and Haynesville Shale to the facility.

“We are now in a commodity business in the LNG space,” Souki said. “And in a commodity business, you want to be the low-cost provider. And that’s what we are.”

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Horizontal drilling paired with hydraulic fracturing has transformed the United States from a natural gas importer into an export powerhouse.

Over the next two years, projects capable of producing up to nearly 90 million metric tons of LNG per year are expected to reach final investment decisions that will require more than $200 billion of construction work through 2025, global research firm Wood Mackenzie estimates.

If the proposed projects land contracts and move forward, they will add thousands of construction jobs and hundreds of high-paying permanent jobs, and will create a much-needed outlet for the record 21.7 billion cubic feet of natural gas being produced in the Permian Basin of West Texas and the Eagle Ford Shale of South Texas.

Launched by Souki, Gentle and industry veterans in 2016, Tellurian obtained a federal permit to build Driftwood LNG export terminal in April. Gentle said the deal with Petronet was the result of yearslong business relationships with executives with the Indian gas import company.

“We’ve known them for decades,” Gentle told the Houston Chronicle. “When we started Tellurian, we saw India as one of the largest growth markets in the world. Petronet was one of the first companies that we talked to.”

sergio.chapa@chron.com