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French oil and gas giant Total SA will run liquefied natural gas (LNG) regasification terminals at Mundra and Dhamra and roll out 1,500 fuel stations over 10 years in partnership with the Adani Group as it looks to tap demand in the world’s fastest-growing energy market.
Total and Adani Group did not disclose the financial details of the agreement, but persons briefed on the deal said the Euronext and New York-Stock Exchange-listed French multi-national would invest more than ₹2,000 crore in a joint venture to develop multi-energy offerings to the Indian market such as LNG and fuel retailing.
Patrick Pouyanne, CEO, Total
This is because a firm looking to get a licence to retail fuel should have a minimum investment of ₹2,000 crore in exploration or production, refining, gas or product pipeline, or terminals, according to government policy. Total, the world’s second-largest LNG player, is expected to own as much as 50 per cent in the JV, which will accommodate the Adani Group’s interests in LNG regasification facilities, LPG terminals and city gas distribution networks.
Adani’s fuel foray
It will also mark the Adani Group’s entry into fuel retailing in India, which is dominated by state-run oil refiners IOCL, BPCL and HPCL, and private firms, including Reliance Industries Ltd, Royal Dutch Shell and Russia’s Rosneft-backed Nayara Energy (formerly Essar Oil).
The partnership with Adani Group will help Total emerge as the biggest private player in India’s LNG sector, overtaking Petronet LNG. Total picked Adani Group for a larger India play because the Ahmedabad-based conglomerate has the downstream infrastructure critical to its plans.
This also explains why Total exited from the 5-mt LNG regasification terminal at Hazira in Gujarat in August by selling its 26 per cent stake to the terminal’s majority partner, Shell Gas BV, a unit of Royal Dutch Shell plc. Total bought the Hazira stake in 2004.
The retail fuel outlets will offer Indian customers Total’s full range of fuels, lubricants and other products and services.
“The collaboration enables us to associate with Total’s century-old legacy, global presence, scale and unparalleled go-to-market expertise,” Gautam Adani, Chairman, Adani Group, said.
“The partnership between Total and Adani Group illustrates our joint commitment to assisting India to diversify its energy mix and to ensure supply of reliable, affordable and clean energy to consumers,” said Patrick Pouyanné, Chairman and CEO, Total.
The Adani Group owns a 25 per cent stake in a 5-million tonne capacity LNG import terminal at Mundra in Gujarat, where it runs India’s biggest port. The conglomerate is also constructing a 5-mt capacity LNG import terminal at Dhamra port in Odisha.
The group runs city gas distribution (CGD) networks in Ahmedabad, Vadodara, Faridabad and Khurja and has won rights to set up CGD networks in 13 more cities on its own and another 16 through a joint venture with Indian Oil Corporation.
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