Total SA has reportedly announced its decision to exit from the Hazira Liquified Natural Gas venture based in Gujarat, India. The French oil major will sell the 26% stake it holds in the project to its venture partner, Shell.

Shell Gas B.V, owned by Royal Dutch Shell plc, confirmed in a statement that it has signed a binding Letter of Intent with Total, agreeing to buy its equity the Hazira LNG and Port Venture, of which Shell already owns a share of 74 percent.

For the uninitiated, the Hazira LNG and Port venture is an amalgamation of two companies namely Hazira LNG which looks after a regasification center in Gujarat and Hazira Port, which runs a direct berthing multi-cargo port. Benefiting from Total’s exit, Shell will now gain full access over the Hazira Port, including commercial and operational flexibility, to optimize integrated value and create valuable propositions for customers.

The buyout perfectly aligns with Shell’s strategy to enhance its presence in the natural gas market in India, the world’s fourth-largest consumer of LNG. In its statement, the company stated that it aims to bridge the gap between energy demand and supply, and further enhance the accessibility to natural gas in India. Industry experts believe that it is a logical move by Shell to gain control over the port’s LNG business due to the growing demand for LNG and Hazira’s proximity to industrial belts.

As per the Times of India, Total SA has also signed another agreement with the oil major, agreeing to sell half a million tons of LNG annually. The LNG will be sourced from Total’s global portfolio and supplied across India and its neighboring countries over the next five years.

According to records, The Hazira LNG, since its inception in 2005 had expanded the terminal from a smaller regasification capacity of 2 million tons per annum to 5 million tons per annum by 2013. It was supposedly the first terminal to bring ‘spot” LNG supplies into India.