French energy giant Total has signed a deal with India’s Adani Group to develop LNG projects in the subcontinent, along with 1,500 petrol stations.
The joint venture is expected to help meet rising Indian gas demand, and take advantage of road building.
Total is the world’s second-largest LNG (liquefied natural gas) trader and Adani is a private conglomerate trading in logistics, port infrastructure and commodities.
The companies are due to build several LNG terminals in India, including the previously announced Dharma LNG site to handle 5 million tonnes per year.
Total and Adni are also due to develop the 1,500 petrol stations over the next 10 years, as the Indian market grows 4 per cent per year with India’s rising middle class and road-building programmes.
The deal envisages building 6.5 million tonnes of storage at Padur in the southern state of Karnataka and Chandikhol in Odisha in the east. This is expected to double the emergency cover to 22 days, at current consumption growth rates, in case of supply disruption.
India has a current strategic storage capacity of over 5 million tonnes in underground rock caverns in Mangalore and Padur in Karnataka and Visakhapatnam in Andhra Pradesh.
HPS Ahuja, CEO of the Indian Strategic Petroleum Reserve Ltd, said the building of the storage would take up to eight years.
“We are a 4.5 million barrel per day consuming market, with the refining capacity of 5 million barrels per day. Demand for petroleum products has been increasing at a compounded annual growth rate of 5.5 per cent from 2013 to 2017,” he said.
India is estimated to be adding 330,000 to 380,000 barrels per day to global oil demand, around 20 per cent of the incremental demand globally. “Our domestic production will be unable to meet our ever-increasing domestic demand of petroleum fuels and petrochemicals and India will continue to depend on imports for foreseeable future,” Pradhan said.
With rising demand comes increased opportunities for European firms.
Patrick Pouyanné, chief executive of Total, told the media: “India’s energy consumption will grow among the fastest of all major economies in the world over the next decade. The partnership between Total and the private Adani Group illustrates our joint commitment to assisting India to diversify its energy mix and to ensure a supply of reliable, affordable and clean energy to consumers.
“We are thrilled to build this broad partnership with the Adani Group, benefitting from its in-depth knowledge of the Indian energy market, as well as its access to infrastructures through a significant footprint in several of the country’s key ports.”
Gautam Adani, Adani chairman, said: “The global synergy between the two groups presents widespread benefits and long-term value for the economy and the people of India.
“We are looking forward to this opportunity to touch millions of lives by leveraging our collective footprints and domain expertise in the energy sector.”
India’s market is growing rapidly, as are its air-pollution issues. Picture credit: Wikimedia