Total nears CGD/LNG terminal deal with Adani Gas

Vol 22, PW 18 (27 Jun 19) Midstream & Downstream

French major Total is poised to complete due diligence of its estimated Rs12,000cr ($1.7bn) deal to buy 37.5% in billionaire Gautam Adani-controlled Adani Gas.

Total also wants stakes in two Adani LNG terminals at Mundra in Gujarat and Dhamra in Odisha. Two well-placed sources tell this report Total is carrying out a forensic appraisal not just of Adani's city gas business but also the 5m t/y Mundra LNG terminal, where Adani partners GSPC, and the upcoming 5m t/y terminal at Dhamra.

"Due diligence is almost over," we hear. "Only a few areas are pending."

Total is expected to conclude the deal within the next three to four months, most probably before Diwali in October. Once sealed, adds a source, Total will set up a new office in Mumbai to oversee its new city gas and LNG terminal business.

"Everything is being done in secret," we are told. "And directly from (chairman) Gautambhai’s office in Ahmedabad, not even from the Adani Gas office."

With secrecy paramount, Adani employees in Ahmedabad are under surveillance to ensure no information is leaked. But this report learns Total wants half of Adani's 74.8% stake in Adani Gas or 37.4% - not 30% as widely reported.

Our sources predict Total will spend Rs12,000cr ($1.7bn) - not Rs5500cr ($790m) as widely reported; the remaining 25.2% in Adani Gas will stay with the public through the Mumbai and National Stock Exchange.