Total signed a binding Letter of Intent with Shell for the sale of 26 percent of its minority equity stake in the Hazira LNG regasification terminal in India, Total announced Monday.
The transaction remains subject to the approval of regulatory authorities, a press release said. The price of the sale was not provided.
Once the transaction is completed, Shell will own 100 percent of the Hazira terminal in Gujarat state.
The French energy giant also signed an agreement to sell 0.5 million tons of LNG per year to Shell over five years, on a delivery basis to supply the markets of India and neighboring countries.
The deliveries will be sourced from Total's global LNG portfolio and are expected to begin in 2019, according to the statement.
Philippe Sauquet, president of Gas, Renewables and Power at Total, said the equity sales deal enabled Total to capture value through an asset disposal, while the LNG sales contract allowed the company to maintain the balance of its LNG portfolio.
"We remain committed to supply the Indian subcontinent, which is a key market experiencing strong growth in LNG demand," he added.
Located in Gujarat's Surat district, the Hazira Terminal includes a LNG storage and regasification terminal within a fully functional port, and "regarded as a key foreign direct investment (FDI) project and represents one of the largest international investments in India in the energy sector," according to Shell's website.
By Hale Turkes