Total has completed its $1.5 billion acquisition of Engie’s portfolio of upstream liquefied natural gas (LNG) assets, which includes participating interests in liquefaction plants – notably the US-based Cameron LNG project – long-term LNG sales and purchase agreements, an LNG tanker fleet, as well as access to regasification capacities in Europe.
“Acquiring Engie’s LNG business is a real step-change for Total, allowing us to leverage size and flexibility in the fast-growing and increasingly commoditized LNG market,” commented Patrick Pouyanné, Chairman & Chief Executive Officer of Total. “This transaction makes Total the second-largest global LNG player among the majors, with a worldwide market share of 10%, and the group will manage an overall LNG portfolio of around 40 metric tons (MT) per year by 2020. It also helps us to build a position in the US LNG market, with the 16.6% stake in the Cameron LNG project.”
Following the transaction, Total will take over the teams in charge of the upstream LNG activities at Engie. Additional payments of up to $550 million could be payable by Total in case of an improvement in the oil markets in the coming years.
Total’s LNG portfolio by 2020 will include:
- A total volume of LNG managed of 40 MT/year;
- A liquefaction capacity portfolio of 23 MT/year, well distributed among the major LNG production areas: Middle East, Australia, Russia and the United States;
- A worldwide LNG trading contracts portfolio of 28 MT/year to supply each LNG market with competitive and flexible resources;
- A role of a key supplier for the European market with regasification capacities of 18 MT/year; and
- A fleet of 18 LNG carriers, of which 2 are FSRUs (floating storage and regasification units).