Total, which signed last year an agreement with Adani, the largest private energy and infrastructure group in India, to cooperate in fuel retail and LNG activities, has decided to expand its strategic partnership with Adani, to further take part to the development of the Indian gas market.
In October 2018, the two companies signed an agreement to jointly develop energy business projects in the Indian market, including fuel retail and LNG activities. The two companies will work together on various LNG regasification terminals, including the 5 Mt/year Dhamra LNG project on the East coast of India (50% each), and potentially the Mundra LNG terminal. Besides, they decided to set up a joint venture (JV) with the aim to develop a retail network of 1,500 service stations over the period of 10 years.
Under Total's new plans, Total will acquire a 37.4% stake in Adani Gas, one of the four main distributors of city gas in India, from Adani, which holds 74.8%, for INR 57bn (US$800m). To comply with Indian stock market regulations, Total will launch a tender offer to public shareholders to acquire up to 25.2% of Adani Gas' equity shares before buying the remaining shares from Adani. Pending regulatory approval of the transaction, Adani and Total would each own 37.4% in Adani Gas, with the other shareholders owning the remaining 25.2%. Adani Gas aims to expand its gas distribution activities over the next 10 years through its 38 concessions covering 7.5% of the Indian population. Adani Gas bets on the strong growth of gas demand in India, as the government aims to diversify its energy mix (target of 15% of gas in the energy mix by 2030) and to develop domestic use of gas in cities and as fuel for vehicles.
Moreover, Total and Adani will strengthen their LNG partnership. The two companies will set up a JV to market LNG in India and Bangladesh. In addition, Total will supply LNG to Adani Gas. In early 2019, Total divested its 26% stake in the 5 Mt/year Hazira LNG terminal to Shell.