Adani Enterprises, Total SA reach agreement on retail network, LNG businesses

By: | Published: October 18, 2018 4:23 AM

adani, totalAdani earlier this year turned out to be the biggest winner under the 9th licensing round of city gas distribution

A day after Total SA’s chairman and chief executive officer Patrick Pouyanne said the company is eyeing to enter various energy segments in India, the French hydrocarbon major on Wednesday announced that it has tied up with Adani Enterprises for liquefied natural gas (LNG) and fuel retailing businesses.

The combined force will develop various regassification terminals including Dhamra in the east coast of India, apart from setting up 1,500 fuel retail outlets over the next 10 years.

While Total is the world’s second-largest private LNG player, Adani is having large presence in India through infrastructure.

The tie-up is expected to benefit as well as boost India’s vision to increase the use of natural gas in the overall energy mix from the current 6.5% to 15% by 2030.

Total will be re-entering the LNG segment as the company in August agreed to sell its 26% stake in Hazira LNG regasification terminal in Gujarat to Shell India through a binding letter of intent.

Total has also signed an agreement to sell 0.5 million tonne of LNG per year to Shell for the next five years on a delivery basis so that the latter could supply to Indian market as well as neighbouring countries.

India already has four LNG terminals, and at least 10 more LNG projects are coming up which will likely to take the total capacity of terminals in the country to around 72.5 million tonne per annum (MTPA).

Adani earlier this year turned out to be the biggest winner under the 9th licensing round of city gas distribution. It was awarded 13 geographical areas on its own and another nine in partnership with Indian Oil wherein it will have exclusive right to provide piped natural gas to households and compressed natural gas (CNG) for vehicles.

A total of 4,346 CNG stations are to be set up in 84 geographical areas and 2.1 crore households will be provided with piped cooking gas, as per the commitment made by the licence winners for 84 geographical areas under the ninth CGD round administered by the Petroleum and Natural Gas Regulatory Board.

In the fuel retailing segment, the two companies will be opening outlets on highways and intercity connections to take advantage of a market growing at 4% per year, driven by the development of road infrastructures and emergence of the middle class, the companies said in a joint statement.

“These new service stations, in line with international standards, will offer Indian customers Total’s full line-up of fuels, lubricants as well as a broad range of other products and services,” the statement said.

India, at present, has 63,275 retail outlets, of which 56,999 belong to state-run companies. Private companies so far have only 6,276 outlets across the country — 4,756 outlets by Nayara, 1,400 by Reliance Industries, 114 by Shell and six by other private players.

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