French multinational integrated oil and gas company Total S A has partnered with Gautam Adani-led Adani Group to supply and market natural gas in India, Total said in a statement. The net acquisition cost of the deal stands at around $600 million for Total over 2019-20 and the two partners will invest in $1 billion in creating gas infrastructure.
“As part of its strategy to develop new gas markets, Total, the world's second-largest LNG player, expands its partnership with the Adani Group; the largest energy and infrastructure conglomerate in India, to contribute to the development of the Indian natural gas market,” the company said.
The equal partnership between Adani and Total includes several assets across the gas value chain including two imports and regasification LNG terminals -- Dhamra in East India and potentially Mundra in the West, as well as Adani Gas Limited.
Total will acquire 37.4 per cent stake in Adani’s 74.8 per cent stake in Adani Gas. As part of this partnership, Total will bring its LNG and retail expertise and will supply LNG to Adani Gas Limited. Total and Adani 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,” Patrick Pouyanné, Chairman and CEO of Total said in a statement.
He also said Adani will bring its knowledge of the local market and its expertise in the infrastructure and energy sectors and the partnership with Adani is a “cornerstone” to Total’s development strategy in India.
In order to reach 37.4 per cent shareholding in Adani Gas 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 per cent of equity shares before buying the remaining shares from Adani.
Adani Gas aims to expand its distribution of gas in the next 10 years through its 38 concessions covering 7.5 per cent of the Indian population and market natural gas to industrial, commercial and domestic customers, targeting 6 million homes through 1,500 retail outlets of natural gas for vehicles.
