Total exits Hazira LNG, sells stake to Shell
Firm in pact with partner to sell 0.5 mn tonnes of LNG annually for 5 years
International oil and gas company Total will fully exit from its Hazira LNG venture by offloading its 26 per cent stake to Shell, its partner for the project.
“Shell Gas, a subsidiary of Royal Dutch Shell, announced today (Monday) that it has signed a binding letter of intent with Total Gaz Electricité Holdings France to acquire its 26 per cent equity in the Hazira LNG and Port venture in India, subject to regulatory approvals,” Shell said in a press statement. It already had 74 per cent interest in the project.
The Hazira LNG and Port venture comprises two companies — Hazira LNG (HLPL) and Hazira Port (HPPL). While HLPL operates a LNG (liquefied natural gas) regasification terminal in Gujarat, HPPL manages a direct berthing multi-cargo port at Hazira.
Total has also signed an agreement to sell 0.5 million tonnes of LNG per year to Shell over the next five years, on a delivery basis to supply in India and neighbouring countries. The deliveries will be sourced from Total's global LNG portfolio and are expected to begin in 2019, Total said in a separate statement.
“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) at Total.
Total’s full exit is seen as allowing Shell commercial and operational flexibility over Hazira to maximise integrated value and offer creative customer value propositions.
“This portfolio action 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,” Shell said.
In April 2002, Shell-promoted Hazira Port signed a concession agreement with Gujarat Maritime Board for development of port facilities. This was followed by the entry of Total Gaz Electricité Holdings France in the Hazira project in 2004.
The Hazira terminal started operations in April, 2005, and was India's first LNG terminal by a global energy company.
According to Hazira LNG and Port's website, the LNG Terminal and Port facility is a ~30-billion project.
Total's India presence includes marketing and services, gas and power, new energies and refining and chemicals. With this sale, Total’s presence in India's exploration and production segment will be limited to an underground liquefied petroleum gas (LPG) facility.
With this sale, Total’s presence in India's exploration and the production segment will be limited to an underground LPG facility