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Total to supply gas to India through Adani acquisition

14/10/2019
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Total has announced that it is expanding its partnership with the Adani Group to supply natural gas to India.

Total and Adani group hope to take advantage of India's targets to increase the mix of LNG in their total energy consumption by 2030
(Image via Total)

Adani Group is the largest energy and infrastructure conglomerate in India, with a target of expanding its distribution of gas over the next 10 years, in line with the government’s strategy to diversify the country’s energy mix.

Total will purchase a 37.4% stake of Adani Gas Ltd. from the Group. In accordance with Indian stock market regulations, and subject to regulatory approvals, the acquisition will begin with the launching of a tender offer to public shareholders to acquire up to 25.2% of the equity shares before Total buy the remaining shares from Adani. 

This will leave Adani Group with an equal 37.4% stake.

Adani Gas Ltd. holds 38 concessions, through which it aims to expand its distribution of gas to cover 7.5% of the Indian population in 10 years. With Total’s LNG and retail expertise, and natural gas supplies, they’re targeting 6 million homes and 1,500 retail outlets of natural gas for vehicles. 

In addition to the acquisition of shares, Total and Adani Group will have a 50/50 partnership in several assets across the gas value chain, including two imports and regasification LNG terminals: Dhamra in East India and Mundra in the West. They will also establish a joint venture to market LNG in India and Bangladesh.

“Energy needs in India are immense and the Indian energy mix is key to the climate change challenge. 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,” said Patrick Pouyanné, Chairman and CEO of Total.

Currently natural gas represents just 7% of India’s energy consumption, but for the last three years has increased by more than 5% per annum. This is facilitated by active policy of the Indian Government, which has set a target of increasing the share of natural gas in its energy mix - both through domestic use and as fuel for vehicles - to 15% by 2030.

According to a statement by Total, the establishment of the partnership on gas in India represents a net acquisition cost for the company of approximately $600 million over 2019-2020.

“Total’s investment in Adani Gas reinforces India’s natural gas and demand potential,” said Gautam Adani, Chairman of Adani Group.

“The partnership will derive significant synergies between Adani’s capabilities of developing world-class assets and Total’s global best practices as well as leveraging business synergies across LNG, fuel retail and city gas distribution.”

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Total to supply gas to India through Adani acquisition - Time to read 3 min
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