Adani Total Gas teams up with INOXCVA for LNG delivery; stock rises

Adani Total Gas Ltd (ATGL), city gas distribution arm of Adani group, and Gujarat-based INOX India Ltd (INOXCVA) have inked a pact to strengthen the liquefied natural gas (LNG) ecosystem in India. INOXCVA is one of the world’s leading cryogenic liquid storage, distribution and re-gas solutions providers.

Reacting to the news, shares of Adani Total Gas gained as much as 1.5% to ₹1,004.95 on the BSE, while shares of INOX India, which recently made its debut on stock exchanges, rose 5.3% to ₹958.40 apiece.

As per the contract, ATGL, in which French energy giant TotalEnergies SE has a 37.4% stake, and INOXCVA will mutually accord a “preferred partner” status for the delivery of LNG and LCNG (Liquid to Compressed Natural Gas) equipment and services for identifying and exploring possible collaboration opportunities for strengthening the LNG ecosystem in the country.

As preferred partners, ATGL will have certain project level benefits, which includes preferential treatment to ATGL and access to advanced scheduling, and consideration for collaborative opportunities for establishing LNG/LCNG stations, LNG satellite stations, transitioning to LNG as a transport fuel, LNG logistics, as well as developing small-scale liquid hydrogen solutions for the industry, Adani group company says in an exchange filing.

The mutual support agreement covers role and obligations on either side to leverage expertise of both the Parties to develop the LNG Infrastructure including small-scale LNG plants, LNG stations, bringing economy of scale for conversion of heavy vehicles on LNG, developing best practices towards HSE, fuel efficiency, high quality conversion and services.

Speaking on the collaboration, Suresh P Manglani, Executive Director & CEO, ATGL says, “Air pollution and greenhouse gas (GHG) emissions are on the rise. With the ongoing rapid industrial growth and huge increase in heavy vehicles for transportations of goods, challenges will become even more formidable going forward. This partnership with INOXCVA shall help ATGL in furthering phased transition of long-haul heavy vehicles, buses currently using HSD/diesel to LNG, thereby helping over 30% reduction in CO2 and GHG emissions.”

“ATGL will also fast-track setting up of LNG stations across the country for boosting the confidence of fleet operators to embrace LNG as transportation fuel,” adds Manglani.

Siddharth Jain, Promoter and Non-Executive Director, INOXCVA says, “As our economy prepares to go into an overdrive, it is imperative that we also maintain a focus on ensuring that the transition happens in a sustainable manner. We are, therefore, excited about our cooperation with ATGL, which would look to strengthen the LNG ecosystem and building & promoting LNG as a transport fuel.”

ATGL, India’s leading private operator in gas distribution, is developing city gas distribution (CGD) networks to supply piped natural gas (PNG) to industrial, commercial and domestic (residential) customers and compressed natural gas (CNG) to the transport sector.

India currently has about 25 gigawatt (GW) of gas-based power capacity installed, which translates to about 30 million-35 million metric tonnes a year of LNG demand, as per S&P Global report. With over 400 CNG stations and 878,175 residential connections being set up from April to October 2023, the government is trying to increase domestic production of natural gas and adopted strategies for the promotion of biofuels, compressed Biogas, National Gas Grid for pipeline infrastructure, City Gas distribution Networks and LNG regasification terminals. 

As part of the plans to usher in natural gas as a transition fuel for the future, India is spending over ₹3 lakh crore by 2026 to set up an extensive natural gas infrastructure. LNG terminals at ports are increasing capacity from 42 MTPA at six terminals to over 80 MTPA at 10 terminals by 2024. Other expansions include 34,600 kilometres of pipelines by 2024 from nearly 22,000 kilometres in 2022, PNG connections to 60 million by 2030 from 9.3 million in 2022, Compressed Natural gas (CNG) stations to 10,000 by 2030 from 4500 in 2022, etc.

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