Total to exit Hazira LNG, sell 26% stake to Shell

French energy giant Total SA will exit the Indian LNG venture by selling 26 per cent stake to its partner Royal Dutch Shell, the two companies announced today.

Total had in March 2004 picked up 26 per cent stake in the 2.5 million tonnes a year Hazira liquefied natural gas (LNG) import terminal in Gujarat. The terminal capacity was later doubled to 5 million tonnes.

Hazira LNG terminal was commissioned in 2005 and expanded to 5 million tonnes in 2013.

Shell holds the remaining 74 per cent stake in Hazira LNG.

"Total has signed a binding Letter of Intent (LOI) with Shell for the sale of its 26 per cent 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.

Shell in a separate statement said its subsidiary, Shell Gas BV has entered into an agreement with Total Gaz Electricit Holdings France to acquire its 26 per cent equity in the Hazira LNG and Port venture located in Gujarat.

Neither company disclosed financial details of the deal.

In parallel, Total signed an agreement to sell 0.5 million tonne LNG per year to Shell over 5 years, on a delivery basis to supply the markets of India and neighboring countries. 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."
He added: "This purchase creates a fully-owned and integrated Shell value chain supply from our global LNG portfolio, regasification at the Hazira facility, and downstream customer sales. It enables Shell to better serve Indian customers and meet the country's long-term need for more and cleaner energy. This also significantly strengthens the connection of the fastest growing gas markets in the world, India, and Shell's unrivaled portfolio of competitive gas supply."