French energy giant TotalEnergies has started commissioning a newly-built liquefied natural gas import facility at Dhamra port near India’s eastern coast, to be operated in a joint venture with India’s Adani group.

TotalEnergies confirmed the delivery of the first cargo to the Dhamra LNG terminal on Monday and noted that the Adani Total Private Limited (ATPL) joint venture has kicked off the process of “gradual commissioning of the terminal, which is expected to start commercial operations at the end of May 2023.”

The statement by the French energy giant confirms a recent Upstream report, which claimed that the Dharmra LNG facility is likely to be commissioned within weeks.

Dhamra is the first such facility in eastern India and the partners have spent up to 60,000 million Indian rupees ($730 million) in laying the ground and building it, Upstream understands.

TotalEnergies stated that with regasification capacity of 5 million tonnes per annum of LNG, the Dhamra LNG terminal “adds more than 10% to India’s regasification capacity, strengthening the country’s position as the world’s fifth largest LNG importer”.

The company added that the newly commissioned LNG facility would also enable India “to increase the share of natural gas in its energy mix from 8% to 15% by 2030 to reduce its carbon intensity”.

Thomas Maurisse, senior vice president LNG at TotalEnergies said the company has “completed the first delivery of LNG to the new Dhamra LNG terminal, developed in partnership with Adani, with cargo from Qatar.”

Energy security

“The commissioning of the Dhamra terminal reflects TotalEnergies’ ambition to support India’s energy transition and supply security,” Maurisse said.

“India wants to develop the use of natural gas to reduce the carbon intensity of its energy mix by replacing coal, and LNG can therefore meet growing domestic demand,” he added.

Qatari LNG carrier Milaha Ras Laffan docked at the Dhamra port on 1 April, bringing in 2.6 trillion British thermal units of supercooled gas, which will be used to commission the terminal.

The Total Private Limited joint venture comprises TotalEnergies and India’s Adani group as key stakeholders, with each holding a 50% interest.

The commissioning of the LNG facility comes at a time when the Adani group is in the midst of a financial storm which has hammered its share price and left partners, including TotalEnergies, sweating on their exposure.

The Adani Group, owned by billionaire Gautam Adani has witnessed billions of dollars wiped off its market capitalisation this year, following corporate fraud allegations by US-based Hindenburg Research.

The regasification facility is expected to initially import at least 2 million tonnes of LNG in the first year of its operation but will ramp up to a full capacity of 5 million tpa.

Dhamra will be the second operational LNG terminal on India’s eastern coast following the commissioning process, while five additional import facilities are located near the nation’s western coast.

It is expected to be the main supply point on the recently completed Urja Ganga pipeline developed by India’s Gail, providing gas access to over 35% of India’s population, covering about 20% of the country’s land mass.

Fivefold rise

India’s gas consumption is expected to jump by up to 500% in the coming years, along with a sizeable increase in gas infrastructure and LNG import capacity, according to Prime Minister Narendra Modi.

Modi recently said the country is working on a “mission mode” to scale up consumption of natural gas, increasing its share of the country’s energy mix to up to 15% by 2030, up from the existing 6%.

India’s regasification capacity, which stood at 21 million tpa in 2014, was double this by the end of 2022.

India is already the world’s fourth-largest importer of LNG, with six regasification terminals and a combined nameplate capacity of up to 42.5 million tpa, and this is expected to increase up to 70 million tpa by 2030.

The share of LNG in India’s gas consumption is also expected to rise to 70% from the current 50% over a 10-year period, government sources have told Upstream.

India’s Adani group has been at the centre of financial turbulence in recent months, after it came under attack by a US-based short seller amid allegations of accounting irregularities.

The claims made by Hindenburg Research were denied by Adani but wiped off $120 billion from the group’s market value during the sell-off.

The value of TotalEnergies’ portfolio exposure to Adani dipped to $3.1 billion, on 31 December 2022, but have recovered to $5.1 billion, led by the recent revival in the latter’s stock prices on Indian bourses.

TotalEnergies recently noted that its investments in Adani Group companies “were undertaken in full compliance” with applicable Indian laws and with the company’s own internal governance processes.