adani: Oiltanking deal to help Adani play bigger role


Adani Ports and Special Economic Zone’s (APSEZ) acquisition of a 49% stake in Indian Oiltanking last week will expand the Adani arm’s storage and transportation capacities for petroleum products and possibly set the stage for a foray into oil exports, through the joint venture company.

Indian Oiltanking was an equal joint venture between Indian Oil Corporation (IOCL) and Oiltanking GmbH, Germany, formed in 1996 to provide storage and logistics solutions for crude oil and petroleum products. On November 9, APSEZ, the flagship transportation arm of Adani group and India’s largest private ports and logistics company, bought Oiltanking’s 49.3% stake in the joint venture for ₹1,050 crore.

“This stake gives APSEZ an entry into India’s downstream oil sector which so far has been a preserve of the state-run oil marketing companies. As a partner of IOCL, APSEZ will not only have access to the storage facilities of IOCL but also the downstream oil market as well as the workings and data of the downstream industry. Indian Oiltanking builds terminals for others in the industry, too. This may well be the first step Adani Group has taken in this industry for a bigger and larger play in a few years,” said a senior official from an oil company on the condition of anonymity.

Adani Group and IOCL did not respond to an email sent.
In an investor presentation after the acquisition, APSEZ said this move enables it to diversify its cargo mix alongside improvement in realization and margin with India’s demand for crude and POL (petroleum, oil and lubricant) forecasted to more than double in the next two decades. “The company has a strong potential for growth,” it said in the presentation. The acquisition, it added, is well aligned with its strategy of becoming the largest transport utility. After the acquisition, the company will undergo a name change and APSEZ will appoint the managing director for the new entity. The finance director will be a nominee of IOCL and will report to the managing director.

“With the strategically located assets in India, this acquisition will allow the Adani Group to enter the import and export of POLs in India,” said a second official aware of the development. IOTL (Indian Oiltaking Ltd) is engaged in building, operation and maintenance of liquid storage tanks under ownership and build, operate, own and transfer (BOOT) models.

IOTL’s terminals handle petrol, diesel, naphtha, fuel oil, kerosene oil and ethanol, among others. The terminals are well connected with railway lines and pipelines and plan to expand capacity going forward. It owns terminals in Navghar (Maharashtra), Raipur (Chhattisgarh) and Goa and operates and maintains terminals in Paradip, Odisha, Dumad (Gujarat) and JNPT (Maharashtra). It also has 90 acres of land parcels in Maharashtra, Jamshedpur and Punjab and some commercial real estate in Mumbai and Kolkata.

“With this acquisition, APSEZ’s oil storage capacity jumps 200% to 3.6 Mn KL (million kilolitres), making it India’s largest third-party liquid storage company. This ties well with our ambition to become the largest transport utility globally,” Karan Adani, CEO and whole-time director of APSEZ had said on November 9. He added that this stake buy was aligned with APSEZ’s strategy of diversifying the cargo mix with focus on products and services having higher realisation and margins.

IOTL is on a growth spree. It recently signed a 25-year BOOT contract with Numaligarh Refinery for the construction, operation, and maintenance of 0.6 Mn KL crude storage tanks at the Paradip Port.


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