French Total signed an agreement with Engie to acquire its portfolio of upstream LNG assets for an overall value of $1.49 billion, making the French company the second largest global LNG player, Total announced late Wednesday.
The company said the portfolio includes participating interests in liquefaction plants, notably the interest in the Cameron LNG project in the U.S., long-term LNG sales and purchase agreements, an LNG tanker fleet as well as access to regasification capacities in Europe.
Total noted that 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.
'The combination of these two complementary portfolios will allow the group to manage an overall volume of around 40 million tonnes of LNG per year by 2020, making Total the second largest global player among the majors with a worldwide market share of 10 percent,” Patrick Pouyanne, chairman and CEO of Total said.
“With the equity stake in the Cameron LNG project, Total will also become an integrated player in the U.S. LNG market, where the Group is already a gas producer,' he added.
The transaction is expected to close by mid 2018 and will have an effective date of Jan. 1, 2018.
Following the transaction, Total will take over teams of around 180 employees in charge of the LNG activities at Engie.
The transaction will bring to Total 2.5 million tonnes of liquefaction capacity per annum to reinforce the company's existing portfolio, bringing it to 23 million tonnes per annum by 2020.
A portfolio of long-term LNG purchase and sale contracts will enable the group to increase its overall portfolio to 28 million tonnes per annum by 2020. Such a portfolio will ensure a diversified supply from Algeria, Nigeria, Norway, Russia, Qatar and the U.S., and outlets balanced between Europe and Asia.
Overall, in combining its interests in liquefaction plants and its portfolio of third party supply contracts, Total will manage a global volume of nearly 40 million tonnes per annum.
By Murat Temizer
Anadolu Agency
energy@aa.com.tr