Total SA Expanding In India

As part of its strategy to develop new gas markets, Total SA, the world’s second-largest LNG player, is expanding its share of the Adani Group, the largest energy and infrastructure conglomerate in India, in a move intended to contribute to the development of the Indian natural gas market.

Total SA has agreed to acquire a 37.4% stake in India’s Adani Gas Ltd., first through a tender offer to public shareholders to acquire up to 25.2% in Adani, with the rest to be purchased from the Adani family. Following completion of the deal, both Total and the Adani family will hold 37.4% of the company, with 25.2% remaining with public shareholders, Adani Gas said in a separate statement filed with the Bombay Stock Exchange.

No financial details were included, but Total said that Taking into account the divestiture of the Adani Group’s interest in the Hazira terminal early 2019, the establishment of this partnership on gas in India represents a net acquisition cost for Total of approximately $600 million.

“Energy needs in India are immense and the Indian energy mix is key to the climate change challenge,” said Patrick Pouyanné, chairman and CEO of Total.  “Firmly investing to develop the use of natural gas in India is in line with Total’s ambition to become the responsible energy major.

“The natural gas market in India will have a strong growth and is an attractive outlet for the world’s second-largest LNG player that Total has become. Adani will bring its knowledge of the local market and its expertise in the infrastructure and energy sectors. This partnership with Adani is cornerstone to our development strategy in this country.”

The Indian natural gas market represents a substantial growth perspective. Total said it is currently only 7% of energy consumption in India, but has grown over the last three years by more than 5% per year, supported by an active policy of the Indian government that aims to diversify its energy mix and develop domestic use of gas in cities and as fuel for vehicles. India has set the ambitious target of increasing the share of natural gas in its energy mix to 15% by 2030.

The partnership between Adani and Total includes several assets across the gas value chain, notably two imports and regasification LNG terminals: Dhamra in East India and potentially Mundra in the West, as well as Adani Gas Limited, one of the four main distributors of city gas in India.

As part of this partnership, Total will bring its LNG and retail expertise and will supply LNG to Adani Gas Limited. Total and Adani will also establish a joint venture to market LNG in India and Bangladesh.