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Total expands partnership with Adani to supply and market gas in India

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LNG Industry,

Total has announced that it is expanding 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.

In the statement, Total claims that the Indian natural gas market represents a substantial growth perspective. It is currently only 7% of the energy consumption, but has increased over the last three years by over 5% per year supported by an active policy of the Indian Government that looks to diversify its energy mix and develop domestic use of gas in cities and as fuel for vehicles. The country has reportedly set the ambitious target of increasing the share of natural gas in its energy mix to 15% by 2030.

According to the statement, the partnership between Adani (50%) and Total (50%) includes several assets across the gas value chain; notably two import and regasification LNG terminals: Dhamra in East India and potentially Mundra in the West, as well as Adani Gas Ltd, one of the four main distributors of city gas in India of which Adani holds 74.8% and of which Total will acquire 37.4%.

Adani Gas Ltd is aiming to grow 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 6 million homes, as well as through 1500 retail outlets of natural gas for vehicles.

As part of this partnership, Total claims that it will provide LNG and retail expertise and will supply LNG to Adani Gas Ltd. In addition to this, Total and Adani will also establish a joint venture to market LNG in both India and Bangladesh.

Patrick Pouyanné, Chairman and CEO of Total, said: “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.”

In order to reach a 37.4% shareholding in Adani Gas Ltd in accordance with Indian stock market regulations and subject to regulatory approvals, Total claims that it will initially launch a tender offer to public shareholders to acquire up to 25.2% of equity shares before purchasing the remaining shares from Adani.

Taking into account the divestiture of the group’s interest in Hazira terminal early this year, the establishment of this partnership on gas in India represents a net acquisition cost for Total of approximately US$600 million over the 2019 – 2020 period.

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India LNG news LNG import news Natural gas news