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.
"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."
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," the company said.
The move, it said, 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.
"Today marks an important milestone," said Maarten Wetselaar, Shell's Integrated Gas & New Energies Director.
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."
Shell Energy India (SEI) was established in 2017, to aggregate demand from downstream customers and secure competitive international supply to meet such demand and will market and sell that gas to customers across India.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)