There are high expectations in the Indian natural gas industry with demand for it being projected to double in the coming decade. The estimate is that by 2030, India will be consuming 106 billion cubic metres of natural gas. LNG may constitute more than half of this growth in quantities. Keeping this in view, Total SA, the international energy giant is investing up to $600 million in Adani Gas Ltd. The investment will come in the form of acquiring in excess of 37.4% in Adani Gas.
Total will buy some part of this from the promoters, the Adani family and the rest through a tender offer to the public shareholders in Adani Gas. The share price of the company has already started going up following the announcement.
Adani Gas Ltd has chalked out an ambitious plan to expand its gas supply to 6 million homes and setup 1,500 gas retailing stations to take advantage of the requirement for LNG as auto fuel across the country.
Seen in the light of the announcement by Reliance Industries that Saudi Arabia’s Aramco is making an investment of $15 billion in it to acquire a 20% stake in its petroleum business, experts see these as a sign of the recognition that India is an important market for energy companies. The country is already the fourth largest importer of fuels.
Looking at this investment decision by Total in Adani Gas, the company has been making a series of investments elsewhere as well, specifically in LNG. These include an LNG project in Mozambique. Engie SA’s upstream assets have been acquired by Total and could land a project in Papua New Guinea as well.
Piped supply of natural gas for domestic purposes in still in a very nascent stage in the country considering the vast potential that exists.