Total and India’s Adani group have signed an agreement to partner on Adani Gas, one of the four main distributors of city gas in India. Total will acquire a 37.4% stake in Adani Gas, with Adani holding the remainder. It will spend $600mn to expand in India, where energy demand is growing.
“Energy needs in India are immense and the Indian energy mix is key to the climate change challenge,” said chairman and CEO of Total, Patrick Pouyanné. “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.”
India plans to increase the share of natural gas in its energy mix to 15% by 2030. Currently, coal makes up around half of its energy mix. Adani Gas Limited aims to expand its distribution of gas in the next 10 years through its 38 concessions covering 7.5% of the Indian population and market natural gas to industrial, commercial and domestic customers, targeting 6mn homes as well as through 1,500 retail outlets of natural gas for vehicles.
The partnership between Adani and Total includes two import and regasification LNG terminals, Dhamra in East India and Mundra in the West.
To reach a 37.4% shareholding in Adani Gas Limited in accordance with Indian stock market regulations and subject to regulatory approvals, Total will initially launch a tender offer to public shareholders to acquire up to 25.2% of equity shares before buying the remaining shares from Adani.
Taking into account the divestiture of the group’s interest in Hazira terminal early 2019, the establishment of this partnership on gas in India represents a net acquisition cost for Total of approximately $600mn over 2019-2020.
