Fuel trucks branded with the Total SA logo pass along a road in Port Harcourt, Nigeria. Photographer: George Osodi/Bloomberg.

Total To Exit Hazira LNG By Selling 26% Stake To Shell

French energy giant Total SA will exit the Indian liquefied natural gas venture by selling 26 percent stake to its partner Royal Dutch Shell, the two companies announced today.

“Total has signed a binding Letter of Intent with Shell for the sale of its 26 percent minority equity stake in Hazira LNG regasification terminal in India,” the company said in a statement. The transaction remains subject to the approval of regulatory authorities.

Total had in March 2004 picked up 26 percent stake in the 2.5 million tonne a year Hazira liquefied natural gas import terminal in Gujarat. The terminal capacity was later doubled to 5 million tonne. Hazira LNG terminal was commissioned in 2005 and expanded to 5 million tonnes in 2013. Shell holds the remaining 74 percent stake in the company.

Shell, in a separate statement said that its subsidiary, Shell Gas BV has entered into an agreement with Total Gaz Electricité Holdings France to acquire its 26 percent equity in the Hazira LNG and Port venture located in Gujarat. Neither company disclosed the financial details of the deal.

Total has signed an agreement to sell 0.5 million tonne LNG per year to Shell over five years, on a delivery basis to supply the Indian and neighbouring markets. The deliveries will be sourced from Total’s global LNG portfolio and are expected to begin in 2019.

“This deal enables Total to capture value through an asset disposal, while the LNG sales contract allows us to maintain the balance of our LNG portfolio,” said Philippe Sauquet, President Gas, Renewables and Power. “We remain committed to supply the Indian subcontinent, which is a key market experiencing strong growth in LNG demand.”

Hazira LNG & Port venture comprises two companies--Hazira LNG Pvt. Ltd. which operates LNG regasification terminal and Hazira Port Pvt. Ltd. that manages a direct berthing multi-cargo port at Hazira.

The move would allow Shell commercial and operational flexibility over Hazira to maximise integrated value and offer creative customer value propositions
Royal Dutch Shell

The move is consistent with Shell’s strategy to deepen its presence in the gas value chain in India, the fourth largest LNG consumer in the world. Shell aims to contribute in bridging the energy deficit and further augment gas supplies in India, the statement said.

Shell Energy India was established in 2017, to aggregate demand from downstream customers and secure competitive international supply to meet such demand and will market that gas to customers across India.