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Total on track to be No 2 LNG player by 2025
8:21 CAT | 27 Sep 2019
Image: Total
French oil supermajor Total told investors earlier this week it’s developing a global and profitable liquefied natural gas (LNG) portfolio for the benefit of all its stakeholders, amid the evolution of energy markets.
Speaking during Total’s investor day in New York, Philippe Sauquet, the head of Gas, Renewables & Power, said LNG is the engine of gas demand growth, accounting for growth of 15% in 2030, compared to 11% in 2018.
New trends impacting LNG markets
He said new trends are impacting the LNG markets, but Total’s LNG portfolio is well positioned to benefit from them. Over two thirds of global LNG sales are still sold through long-term oil-indexed contracts, but the trend is now moving towards “commoditisation,” Kallanish Energy learns.
Sauquet explained the trends include: long-terms contracts for Europe are indexed to spot gas prices; rapid growth in the Japan Korea Marker (JKM) benchmark swap derivative market; short-term and spot trades are increasing from 27% in 2017, to 32% in 2018; and the market experiencing the first LNG freight financial swap.
Asia will lead demand growth
Asia will lead demand growth as it switches from coal to gas. Both China and India seek a 15% gas share in their energy mix by 2030, he said. But there’s also an opportunity for LNG in Europe as domestic production declines, regas capacity provides flexibility and the end of coal and nuclear energy usage increases the role of gas in the energy mix.
Total’s priority is on low-breakeven, integrated projects. The firm currently has 12 producing LNG projects, and another eight under construction or in pre-first investment decision. It’s present in all major basins, set to produce 30 million tonnes of LNG in 2025.
Some of these projects include Nigeria LNG and its expansion project; the Arctic LNG 2 project following the success in the Yamal LNG; partnership opportunities in North America in the Cameron LNG and Energia Costa Azul projects; the Mozambique LNG facility; and the Papua LNG project.
Laurent Vivier, vice president Gas, said LNG sales will increase by 60% to reach 50 million tonnes per annum (Mtpa) by 2025, with equity production of 30 Mtpa.
Total accessing new markets
He added Total is accessing new markets through floating storage and regasification units (FSRUs) and local partnerships, and is on track to be the world’s No.2 LNG player, compared to BP, Chevron, ExxonMobil and Shell.
Source: Kallanish Energy News
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