In order to make a larger presence in India,聽Total SA聽will buy a 37.4% stake in Ahmedabad-based聽Adani Gas Ltd聽for Rs 6,200 crore. The French energy giant has made an open offer to public shareholders of Adani Gas to acquire up to 25% stake. It has offered to buy shares at 149.63 apiece, which was 8.7% higher than the previous day of the announcement. The deal is an indication of rising global interest in India’s oil and gas sector.
Total SA聽will purchase 37.4% shares in聽Adani Gas Limited聽through a tender offer to public shareholders to聽acquire聽up to 25.2% shares subject to applicable regulations and purchase the residual shares from Adani Family. Adani Family and TOTAL SA shareholders shall ultimately hold 37.4% each and public shareholders shall hold remaining 25.2%. as Securities and Exchange Board of India norms mandate listed companies to maintain minimum public shareholding of 25%.
The partnership will help develop regasification terminals including Dharma Ltd on the east coast of India and Mundra in the west. The partnership comes after a year when the two companies had agreed to set up an equal joint venture to import and retail natural gas. Under the deal Sergei Bobrovsky Jersey , Total will bring its LNG as well as retail expertise and will also supply LNG to Adani Gas.
The partnership will enable Adani Gas to set-up gas distribution network across the country, which is now India鈥檚 largest city gas distribution company with presence in 71 districts in 15 states to 8% of the country’s population. Going ahead, Adani Gas will look to augment its gas distribution network over the next decade to industrial, commercial and domestic customers for homes and vehicles. Compressed natural gas (CNG) is distributed for use in motor vehicles and piped natural gas (PNG) is supplied for domestic household Evgenii Dadonov Jersey , commercial and industrial uses. The two companies will build a fuel retail network of 1,500 stations along highways and intercity connections. Also, the partnership will also establish a joint venture to market LNG in Bangladesh.
The聽acquisition聽of stake by Total SA will be the largest foreign direct investment in India’s city gas distribution industry. After the deal takes a final shape, the shareholding of Adani family and Total will 37.4% each and the rest with public.
Why Total wants to partner with Adani
Total Vincent Trocheck Jersey , the world’s second largest liquefied natural gas (LNG) player, has been active in India since the 1990s and the company here markets petroleum products and associated services and operates in renewable energies. Adani Gas is attractive to Total as the development of the Mundra and Dharma regasification terminals will provide the French energy giant market access for LNG. Also, as Adani was an aggressive bidder in the recent gas distribution auction, it will provide the French company with a firm demand for gas. In fact Aleksander Barkov Jersey , India is at the focal point of Total鈥檚 global plan to become a responsible energy major.
As demand for natural gas in the country is projected to rise from 167 mmscmd in FY19 to 252 mmscmd in FY22, Total wants to be a part of the growth story and setting up a standalone gas marketing and distribution business in the country will take a lot of time and investment. India’s natural gas market promises huge potential, which currently accounts for only 7% of the country’s energy consumption. Supported by an active policy of the government which wants to diversify the energy mix of uses, companies will look at newer markets Cheap Florida Panthers Jerseys , especially in the hinterlands for cleaner fuel mix.聽 To be sure, the government has chalked out plans to more than double the share of natural gas in India’s overall energy mix from 6.2% to 15% by 2030 driven by large supply, competitive pricing, infrastructure augmentation and easier and business-friendly government regulatory norms. That will also help in reducing global warming and make the environment cleaner.
Adani Gas was a natural choice for Total as it has worked with the company in the past. The partnership will focus on exploring new models of delivering cost-effective natural gas in the country where it is most needed to complement traditional pipelines. Adani will bring its knowledge of the local market and its expertise in the infrastructure sector and club Total’s global expertise to make LNG available across the country. In fact Mike Hoffman Panthers Jersey , Adani Gas and its joint venture will distribute gas to six million households in the next 10 years.
To ride the growth curve, Adani Gas will invest Rs 6,000 crore on a standalone basis in the next five to seven years, which will drive strong volume growth. Adani group is constructing a five million tonne capacity LNG import terminal at its Dharma port in Odisha. It is also building a 3.2 million tonne LPG terminal at Mundra port and a 1.2 million tonne LPG terminal at Dharma. As a result of these investments Jonathan Huberdeau Panthers Jersey , Adani Gas has the potential to emerge as one of the key players over the long-term in the city gas distribution business in the country.
The partnership deal is part of Total’s plan to invest as much as $18 billion a year globally between 2019 and 2023 to deliver growth, growth mostly through higher LNG sales of 50 million tonnes a year by 2025, according to the company’s outlook presentation in September this year. Total plans to set up 4,000 service stations in new markets by 2025 of which 1 Anton Stralman Panthers Jersey ,000 are expected to be in India.
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04.03.2020 08:55
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