Info!
UPDATED 1 Sept: The EI library in London is temporarily closed to the public, as a precautionary measure in light of the ongoing COVID-19 situation. The Knowledge Service will still be answering email queries via email , or via live chats during working hours (09:15-17:00 GMT). Our e-library is always open for members here: eLibrary , for full-text access to over 200 e-books and millions of articles. Thank you for your patience.

Total expands Indian gas market partnership

Total, the world's second-largest LNG player, is expanding its partnership with the Adani Group, the largest energy and infrastructure conglomerate in India, in order to further develop India’s natural gas market.

The Indian natural gas market represents a substantial growth sector. Gas currently meets about 6% of domestic energy consumption but its market share has grown over the last three years by more than 5% per annum, supported by Indian government policy that aims to diversify the country’s energy mix and develop domestic use of gas in cities and as fuel for vehicles. India has set the ambitious target of increasing the share of natural gas in its energy mix to 15% by 2030.

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, one of the four main distributors of city gas in India, in which Adani holds a 74.8% interest and of which Total will acquire 37.4%.

Total will supply LNG to Adani Gas as part of the partnership, and both plan to establish a joint venture to market LNG in India and Bangladesh.

Commenting on the news, Wood Mackenzie Research Director Nicholas Browne says:
 ‘Total’s investment in Adani is undoubtedly a show of faith in India’s gas demand growth. Gas currently accounts for just under 6% of energy demand in India. The government has a target to increase this to 15% by 2030. While we don’t consider this likely, gas demand is set to grow considerably. Wood Mackenzie forecasts LNG demand will double from some 37bn cm in 2018 to reach 75bn cm by 2030, equivalent to 7% of the energy mix. LNG will meet approximately 50% of this demand growth, providing a major growth opportunity for Total.’

He continues: ‘Adani is attractive to Total for several reasons. Firstly, the development of the Mundra and Dhamra regasification terminals provides Total with market access for LNG. These terminals are also on the east coast where there is less competition from other terminals. Secondly, Adani Gas was an active bidder in the recent distribution auction rounds. It is planning to expand the pipeline network. In turn, this will provide Total with firm demand for gas. Lastly, developing a standalone gas marketing and distribution business in India would take several years. Working with Adani will accelerate the process for Total.’ 

‘Total has been aggressively expanding its LNG footprint. It took over Engie’s LNG portfolio in 2018 and recently sanctioned investment in Arctic-2 and the takeover of the Anadarko-led Mozambique project. It has access to competitive supply that it can provide Adani. However, the global LNG market is already competitive currently to place LNG volumes. So Adani would not have been short of alternative competitive suppliers. As such, for Adani this is likely to be more about de-risking an investment in expansion while also bringing in a global leader in gas and LNG so support this.’

News Item details


Journal title: Petroleum Review

Countries: India -

Subjects: Gas markets, LNG markets

Please login to save this item