Woodside enters Indian JV
Woodside Petroleum has teamed up with one of India’s richest men to find new customers for its LNG at a time of weakness in the traditional markets of Japan and South Korea.
The scope of the proposed joint venture with Gautam Adani, estimated to be worth more than $US7 billion, is likely to include upstream opportunities in Australia and elsewhere all the way through the value chain to co-operating on LNG import terminals in India, a market still heavily reliant on coal as its fuel source.
The non-binding memorandum of understanding was signed in Gujarat yesterday by Woodside chief executive Peter Coleman and Mr Adani, in the presence of Federal Trade Minister Andrew Robb.
Neither side has provided details on the timing of a venture nor the exact scope or hoped-for investment covered by the MoU.
Woodside would only say it and Adani Enterprises had agreed to “co-operate in identifying, investigating and developing potential business arrangements and commercial initiatives”.
Mr Adani, regarded as the closest of India’s tycoons to new Prime Minister Narendra Modi, is the country’s biggest private port operator with a massive facility on Gujarat’s west coast.
The port includes the world’s biggest coal unloading facility — Mr Adani is trying to develop Australia’s biggest coal project, Carmichael in Queensland — as well as power stations and railway and airport infrastructure.
Mr Adani is also understood to be building an LNG import terminal at his port, at the same time as proposing billions of dollars worth of power station investments elsewhere in India. Gas is likely to be a sought-after fuel.
“India is an important emerging LNG market in which we see enormous supply potential as infrastructure is developed,” Mr Coleman said. in a statement.
“Adani is at the forefront of the LNG industry in India and committed to developing partnerships to support securing reliable long-term supplies of clean energy.”
Mr Coleman flagged a more serious move into India in September when he accompanied Prime Minister Tony Abbott on a visit. to the country.
Last month Mr Coleman stepped up the rhetoric when he spoke of the “very mature” markets in Japan and South Korea, at a time when Woodside is trying to sell gas from its proposed Browse floating LNG development off the Kimberley, and the fact “we’re actually expanding our marketing activities... and targeting some of the growth markets around the world. So I’d expect you’ll see more news on that over the next few months as we expand that.” he told investors.
Woodside’s LNG portfolio is set to change substantially in coming months as it finalises a $US2.75 billion purchase of Apache’s stakes in the Wheatstone and Kitimat developments, which will require it the Perth company to find more gas customers.
India’s democracy and billion-strong population with sound understanding of English have made it an attractive a long made the country a target for corporate Australia, but some global companies have been only for efforts to be thwarted by the country’s India’s heavy bureaucracy and political process.
The Woodside-Adani MoU with Adani Enterprises is one of the most high-profile ones in the history of the two countries.
Mr Modi has pledged to modernise India’s economy and extend regular electricity supplies to all.
