CCI Approves Acquisition of 26% by Shell Gas B.V. in Hazira LNG and Hazira Port from Total Gaz Electricité

On December 6, 2018, pursuant to a share purchase agreement signed on November 6, 2018, CCI approved acquisition of 26% shares by Shell Gas B.V. (‘Shell’) in Hazira LNG Private Limited (‘HLPL’) and Hazira Port Private Limited (‘HPPL’) from Total Gaz Electricité Holdings France (‘Total’). The combination increased Shell’s shareholding in HLPL and HPPL from 74% to 100% and changed Shell’s control in HLPL and HPPL (from joint control to sole control). [1]

Shell is a Dutch company with businesses including oil and natural gas exploration, production and marketing, manufacturing, and marketing and shipping of oil products and chemicals. Shell group companies are engaged in India in the activities of: (i) exploration and production of oil and natural gas; (ii) supply of liquid natural gas (‘LNG’) into India; (iii) provision of LNG regasification (and related storage) services; (iv) wholesale and downstream supply of natural gas; (v) provision of port facilities to LNG terminals; and (vi) supply of fuel products.

HLPL and HPPL are joint venture companies set up by Shell and Total. HLPL provides LNG regasification services (and related storage) to large LNG importers and also has activities in the wholesale and downstream sale of natural gas in India. It operates and manages the re-gasification terminal at the Hazira Port, Gujarat. HPPL owns and manages the Hazira port used for unloading and receipt of LNG and receives a fee from HLPL for access to the facilities at Hazira port and other allied activities.

In its competitive assessment, CCI observed that HLPL is primarily engaged in LNG regasification (and related storage) services and Shell does not have any presence in the product segment other than through HLPL. As regards the activities of HLPL relating to wholesale and downstream supply of natural gas, CCI observed that Shell has independent presence but the extent of presence of HLPL is not significant enough to cause any change in competition dynamics. CCI further observed that HPPL is engaged in provision of port facilities at LNG terminals and Shell does not have any presence in previously mentioned product segment other than through HPPL.

In light of the above, CCI approved the combination as it is not likely to have any appreciable adverse effect on competition (‘AAEC’) in India in any of the markets catered to by HLPL and HPPL.

[1] Combination Registration Number C-2018/11/615.

Published In:Inter Alia Special Edition Competition Law February 2019 [ English
Date: February 1, 2019