French oil and gas giant Total has completed a £1.1 billion acquisition of Engie’s liquefied natural gas (LNG) assets in a portfolio that includes interests in liquefaction plants, including the huge Cameron project in the USA, a tanker fleet of 18 LNG carriers, including two floating storage and re-gasification vessels, and access to European re-gasification sites.
Additional payments of up to £420 million could still be payable by Total if global oil market improvements are made in forthcoming years.
Total said the deal, first announced in 2017, made it the world’s second-largest LNG player.
Following the transaction, Total takes over the teams in charge of the upstream LNG activities at Engie. Total’s LNG portfolio by 2020 is due to include a total volume of LNG managed of 40 million tonnes per year.
There is also the liquefaction capacity portfolio of 23 million tonnes per year of LNG across West Asia, Australia, Russia and the US.
Total has acquired worldwide LNG trading contracts portfolio of 28 million tonnes per year to supply each LNG market with competitive and flexible resources.
The French firm will also have a role of a key supplier for the European market with re-gasification capacities of 18 million tonnes per year.
Total today (Friday) also completed a farm-in deal with Providence Resources for the FEL 2/14 licence in the southern Porcupine basin off Ireland’s southwest coast.
“Providence is pleased to confirm that, having received approval from the minister of state at the Department of Communications, Climate Action and Environment, the farm-out comprising the assignment of equity [35 per cent] and transfer of operatorship of FEL 2/14 to Total Ireland, a wholly owned subsidiary of Total, has now completed,” a Providence statement said.
Chief executive Patrick Pouyanne told the media: “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 commoditised LNG market.
“This transaction makes Total the second-largest global LNG player among the majors with a worldwide market share of 10 per cent and the group will manage an overall LNG portfolio of around 40 Mt per year by 2020.
“It also helps us to build a position in the US LNG market, with the 16.6-per-cent stake in the Cameron LNG project.”
An LNG tanker. Picture credit: Flickr