A Total oil refinery in Dunkirk in 2010. Photo: Andia/Universal Images Group via Getty Images
Total SA is acquiring a 37% stake in the Indian gas distribution firm Adani Gas as the French energy giant looks to capitalize on rising LNG demand in the world's second-most populous nation.
Why it matters: The roughly $600 million deal announced Monday will give Total "a footprint in a market where annual LNG demand will hit 28 million tons by 2023, making it the fourth biggest importer of the fuel," Bloomberg reports. Total is already the world's second-largest LNG player.
The big picture: "Total is the third foreign oil major to enter India’s gas sector after BP PLC and Shell, and it comes at a time when India is spending heavily to cut its carbon emissions," Reuters notes.
What they're saying: "Total’s investment in Adani is undoubtedly a show of faith in India’s gas demand growth," the research firm Wood Mackenzie said in a note.
- They point out that India wants gas to meet 15% of its energy demand by 2030, up from 6% today.
- And while they don't see India hitting that target, their note still sees major demand growth in that timeframe and projects that LNG will meet half of it.