The agreement between the two companies will include Total SA's entry into developing various LNG projects as well as in fuel retail segment through 1500 service station across the country over a period of 10 years.
French energy giant Total SA is all set to mark its foray in India’s fast-growing gas market with its partnership with Gautam Adani-controlled Adani Group. Total, the world’s second-largest liquefied natural gas (LNG) private player, has signed an agreement with Adani Enterprises to invest in downstream sector in India, which would include its entry into developing various LNG projects as well as in fuel retailing segment through 1500 service stations across the country.
“Adani and Total have signed an agreement to jointly develop multi-energy offerings to the Indian energy market… The partnership has set a target of developing various regasification terminals, including Dhamra LNG, on the East coast of India,” the two companies said in a joint statement on Wednesday.
The two companies will form a joint venture to set up a retail network of 1,500 service stations over a period of 10 years. The service stations will come on highways and intercity connections to take advantage of a market growing at 4% per year “driven by the development of road
infrastructures and the emergence of the middle class, which has been open to private investors since 2014”, the statement said.
The fuel network will be in line with the global standards and offer fuels like lubricants, as well as a broad range of other products and services, it added.
“The global synergy between the two groups presents widespread benefits and long-term value for the economy and the people of India. We are looking forward to this opportunity to touch millions of lives by leveraging our collective footprints and domain expertise in the energy sector. It also enables the Adani Group to be part of the country’s vision in adopting cleaner energy,” said Gautam Adani in the statement.
At present, Adani owns 25% equity stake in 5 million tonnes per annum LNG import terminal in Mundra, Gujarat, and is also setting up a similar capacity facility at Dhamra in Odisha at a cost of Rs 5,100 crore. Adani also holds a stake in another under-construction LPG import terminal, which has a capacity of 3.56 million tonnes per annum, at Mundra in Gujarat. This facility is expected to be completed by next month.
“India’s energy consumption will grow among the fastest of all major economies in the world over the next decade,” said Patrick Pouyanné, chairman and CEO of Total SA. Over the next few years, the Indian government is targeting to increase the share of natural gas in its energy basket to 15% and therefore giving a push to city gas distribution projects. Currently, the Indian government meets half of the country’s gas requirements through imports.
Recently, Total SA exited Hazira LNG terminal in Gujarat by selling its 26% equity holding in the project to Royal Dutch Shell. It had picked up the stake in 2004 in the 2.5 million tonnes per annum terminal, the capacity of which was raised to 5 million tonnes per annum in 2013.
Meanwhile, shares of Adani Enterprises were trading at Rs 159.65 apiece, up 1.14% on BSE at 11:15 AM today, from the previous close. Stocks of the company opened at Rs 160.20 and touched an intraday high of Rs 161.65.