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Total to acquire 37% in Indian Adani Gas, sets up gas marketing JV

October 14/2019

MOSCOW (MRC) -- French oil major Total will acquire a 37.4% stake in Indian gas company Adani Gas Ltd, and set-up a joint venture for marketing natural gas in India and Bangladesh, reported S&P Global with reference to the company's statement Monday.

The deal underscores the growing LNG markets in South Asia that have attracted interest from global oil majors to commodity trading houses, on the back of rapid industrialization and urbanization.

Adani Gas is one of the four largest distributors of city gas in India of which Adani Group holds 74.8% and of which Total will acquire 37.4%, the statement said.

"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 of offer to public shareholders to acquire up to 25.2% of equity shares before buying the remaining shares from Adani," Total said in a statement.

Total said as part of its strategy to develop new gas markets it was expanding its partnership with the Adani Group, the parent company of Adani Gas. The partnership includes two imports and regasification LNG terminals -- Dhamra in East India and potentially Mundra in the West, it said.

"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," it added.

Adani Gas 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 6 million homes as well as through 1,500 retail outlets of natural gas for vehicles, the statement said.

Total said taking into account its divestiture of the Hazira terminal in early 2019, its partnership with Adani represents a net acquisition cost of around $600 million over 2019-2020.

In 2018, Shell had acquired a 26% equity in the Hazira LNG and Port venture in India from Total.

Natural gas is currently 7% of India's energy consumption, but it has grown over the last 3 years by more than 5% per annum, supported by government policy to increase the share to 15% by 2030, and develop domestic use of gas in cities and as fuel for vehicles.

As MRC wrote before, last Wednesday, France's Feyzin refinery was in the process of halting units and the steam cracker is running at reduced rates. Local media reported earlier that the refinery had been halting operations since Monday due to a strike. The company said it regrets the decision by labor unions to call a strike while discussions are ongoing with refinery staff about a planned indefinite closure of a unit due to lower product demand.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
Author:Margaret Volkova
Tags:PP, PE, PP block copolymer, homopolymer PP, propylene, ethylene, gas processing, petrochemistry, Shell, Total Petrochemicals, India, Russia, France.
Category:General News
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