TotalEnergies and Adani ready to start up $730 million Indian LNG import terminal

A newly-built liquefied natural gas import facility at Dhamra port near India’s eastern coast has received its first cargo, with joint-venture partners Adani group and French giant TotalEnergies expected to commission the facility within weeks.

The traction comes with Adani in the midst of a financial storm which has hammered its share price and left partners, including TotalEnergies, sweating on their exposure.

Dhamra’s 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.

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 Press Trust of India reported.

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

Commissioning work on the LNG terminal has already started and is expected to be completed within 45 days, Upstream was told.

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The regasification facility is expected to initially import more than 2 million tonnes of LNG in the first year of its operation, but will ramp up to full capacity of 5 million tonnes per annum.

Karan Adani, chief executive of Adani Ports and Special Economic Zones, said the company was “privileged to welcome to Dhamra Port its first cargo of LNG aboard the Milaha Ras Laffan”.

“This is a huge leap forward not only in access to clean and affordable energy but also in decarbonising India’s energy sector,” Adani wrote.

Dhamra will be the second operational LNG terminal near 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, local media reports claimed.

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%.

Modi said that India’s regasification capacity, which stood at 21 million tonnes per annum in 2014, has doubled by 2022 and is now expected to significantly go up in the coming years.

India is already the world’s fourth-largest importer of LNG and has six regasification terminals and a combined nameplate capacity of up to 42.5 million tpa. 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.

Indian portfolio

The Adani Group, owned by billionaire Gautam Adani, is in the middle of a financial storm with billions of dollars wiped off its market capitalisation this year, following corporate fraud allegations by US-based Hindenburg Research.

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.

TotalEnergies’ valuation of its stakes in Indian conglomerate Adani Group companies has recovered to $5.1 billion, led by the recent revival in the latter’s stock prices on Indian bourses.

The French energy giant earlier said that its exposure in Adani group entities had dipped to $3.1 billion, at 31 December 2022.