Shell buys Total’s stake in Hazira LNG terminal

16 January 2019, Week 02, Issue 658

Royal Dutch Shell has completed the acquisition of Gujarat-based Hazira LNG and Port Ventures from French energy major Total. Shell Gas, a Shell subsidiary, acquired Total’s 26% stake to bring its own holdings to 100%.

Hazira LNG and Port, which includes a regasification terminal, is a joint venture between Shell Gas and Total Gaz Electricite. Financial details of the deal have not been disclosed.

“The move allows Shell to build an integrated gas value chain: supply from its global LNG portfolio, regasification at the Hazira facility, and downstream customer sales,” Shell said. Having commercial and operational flexibility over Hazira will allow Shell to offer customer value propositions, it added.

Shell invested in the Hazira project 15 years ago, marking the single largest foreign direct investment (FDI) in India’s energy sector at the time. Total picked up its 26% stake in March 2004.

The 2.5 million tpy terminal was commissioned in 2005 and was expanded to 5 million tpy in 2013. In 2017, Shell established local arm Shell Energy India to combine demand from downstream customers and secure competitive international supply. In August 2018, Shell announced its plans to buy Total’s stake in Hazira LNG and Port. Shell also signed an agreement to buy 500,000 tpy of LNG from Total over five years. 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,” Total’s president of gas, renewables and power, Philippe Sauquet, said at the time.

India’s LNG demand is projected to grow rapidly given the country’s aim to more than double gas usage over the next few years. New LNG terminals are being constructed to add to the four that are operational at Dahej, Hazira, Dabhol and Kochi, all located on the west coast. Six new terminals are planned for both the east and west coasts. State-run Indian Oil is anticipated to commission its first LNG import terminal at Ennore in Tamil Nadu this month. The Mundra terminal in Gujarat is also ready.

Edited by

Andrew Kemp

Editor

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