LNG

TotalEnergies, the French major with a world-class LNG portfolio of 44 million tonnes per annum, is increasing its natural gas infrastructure investments by paying £450 million ($575M) for a gas-fired power plant in the UK to help mitigate its large holdings of intermittent renewables in the British energy markets.

TotalEnergies has signed an agreement with the North American institutional investor EIG for the acquisition of all the shares of West Burton Energy in the UK Midlands.

West Burton Energy owns and operates the West Burton B gas-fired power plant in the English county of Nottinghamshire.

West Burton B comprises three combined-cycle gas turbines (CCGT) with total output of 1.3 gigawatts.

Commissioned in 2013, it is one of the UK’s most advanced power plants and supplies some 1.8 million homes. A 49 MW battery storage system was added in 2018.

“This acquisition rounds out TotalEnergies’ renewable power generation capacity in the UK with a flexible asset that mitigates intermittency to enable the supply of firm power to customers,” explained the French company.

Capacity needs

“Given the size of the company’s renewable portfolio in the country, which currently stands at 1.1 GW of gross installed capacity and 4.5 GW under development, TotalEnergies assesses its need for gas-based power generation capacity at 700 MW, so the company therefore plans to divest 50 percent of the acquired assets,” TotalEnergies added.

“The deal will also allow TotalEnergies to strengthen its trading capabilities in the country’s electricity and gas markets,” said the company.

TotalEnergies plans to supply the gas-fired power plant from its natural gas production in the UK where it operates 30 percent of the projects.

Earlier in June, TotalEnergies also signed two new LNG medium-term and long-term LNG accords in Asia.

These comprised a sales and purchase agreement (SPA) with Indian Oil Corp. (IOCL) for the delivery to India of up to 800,000 tonnes per annum of LNG for 10 years from 2026.

Korean LNG

The second accord was a heads of agreement with Korea South-East Power for the delivery to South Korea of up to around 500,000 tonnes per annum of LNG for five years from 2027.

The company said that these agreements allow TotalEnergies to secure medium-term outlets for its global LNG supply portfolio.

They also strengthen the company's footprint in Asian markets, where it is particularly committed to supporting its customers with their decarbonization strategies.

TotalEnergies reported declines in annual and quarterly net profits as commodity prices plummeted compared with the previous year while the French major sold over 44 million tonnes of liquefied natural gas and opened the Le Havre floating LNG regasification terminal in France while being further boosted by progress in other oil and gas projects.

TotalEnergies, the leading European oil and gas major, has joined with Shell, Brazilian state company Petrobras as well as two Chinese majors to start production from a second development phase of the Mero field offshore Brazil.

TotalEnergies, one of the leading global liquefied natural gas market participants and with plans to re-start the onshore Mozambique LNG export project and expand Papua New Guinea LNG, reported a 12 percent increase in first-quarter net profits compared with the 2022 quarter even amid a softening of oil and gas prices.

French energy major TotalEnergies is considering the 2023 restart date of the onshore liquefied natural gas project in Mozambique based on a visit by executives to the southeast African nation, which is already enjoying the economic benefits of the start-up of the Coral South floating export venture in the southern part of the Rovuma Basin.

The company chairman and chief executive, Patrick Pouyanné, is expected to be among the party planning to travel to Cabo Delgado province where the project is located.

The Mozambican authorities said they were looking forward to welcoming TotalEnergies executives to the country as usual as they work on relaunching the $20 billion venture.

If the TotalEnergies LNG project goes ahead it would help increase Mozambique’s gross domestic product by around $67 billion, according to economists.

The TotalEnergies LNG project is located on the Afungi Peninsula and will use natural gas from the Rovuma Basin Area 1 licence to produce LNG to be transported worldwide.

The onshore Mozambique LNG project has been hindered by insecurity in the region for the last couple of years.

Construction of the plant had to be halted on April 26, 2021, when TotalEnergies declared “force majeure” because of attacks north of the plant location by an Islamist extremist group.

Project delays

TotalEnergies had already delayed first LNG production at the liquefaction plant by two years to 2026.

Since the halt to the onshore project a separate floating LNG plant has come on stream offshore Mozambique.

Italian energy company Eni brought the “Coral-Sul FLNG” production vessel on stream at the end of 2022 and the first cargo was shipped in mid-November 2022.

Eni, as upstream operator of the separate Area 4 licence resources, has started the project with liquefaction capacity of 3.4 million tonnes per annum.

The TotalEnergies-run project onshore has the potential to produce round 20 MTPA of LNG.

A third development, the Rovuma LNG project, may also recover momentum in 2023 for the Area 4 licence group to produce a further 15 MTPA per annum from their resources,

However, analysts said that the shareholders in Rovuma LNG, including the US major ExxonMobil, are unlikely to take a final investment decision on the venture until the TotalEnergies project advances in the next year.

The French major TotalEnergies has signed an agreement with Sempra Infrastructure of the US and the other partners in the Cameron LNG plant in Louisiana for the development of the Hackberry Carbon Sequestration (HCS) project in Cameron Parish.

The other signatories to the deal are Japanese trading houses Mitsui & Co. and Mitsubishi Corp.

TotalEnergies said the HCS project was primarily designed for capture, transportation, and storage of carbon dioxide (CO2) from Cameron LNG.

“The CO2 will be captured by the acid gas removal units, dehydrated, compressed, and transported by pipeline about 10 kilometres away,” the French company explained.

“It will then be permanently stored in a saline aquifer using an injection well with a capacity of up to 2 million tons of CO2 per year,” added TotalEnergies.

Permits

The HCS project filed an application in August 2021 with the US Environmental Protection Agency (EPA) for the construction permit of such an injection well and was the first accepted by the EPA in Louisiana.

“We are pleased to join forces with our partners to significantly reduce CO2 emissions at the Cameron LNG export terminal, thus enabling us to supply our customers with low-carbon LNG,” said Thomas Maurisse, Senior Vice President LNG at TotalEnergies.

Justin Bird, Chief Executive of Sempra Infrastructure, which operates the Cameron plant and holds the assets of two LNG export projcts in Mexico and at Port Arthur in Texas, said the company was pleased to be advancing the development of the Hackberry CO2 project.

“This project is expected to be among the first North America carbon-capture facilities designed to receive and store CO2 from multiple sources,” added Bird.

TotalEnergies noted that development of the Hackberry project remained subject to definitive agreements, obtaining all the necessary permits and with all partners reaching a final investment decision.

Expansion

Cameron LNG is also the subject of an expansion in the form of a single Train with a production capacity of around 6.75 million tonnes per annum, taking capacity over 20 MTPA.

The plant will also be subject to a debottlenecking process to increase the efficiency and output of the existing three liquefaction Trains.

Sempra has also now put the Port Arthur project in Texas back on the fast track route to development.

The proposed Port Arthur plant has all its regulatory permits and will be constructed on a 3,000-acre site in Jefferson County in Texas and with an initial 13.5 MTPA of production.

Thailand’s state-owned energy company said the Yadana natural gas project in neighbouring Myanmar was key to the energy security of both Southeast Asian nations and the Thais will take over the operatorship after the withdrawal of France’s TotalEnergies over human rights issues.

TotalEnergies, the French developer of the onshore Mozambique LNG export project, said the security situation in the southeast African country was improving, opening the way for the future re-start of the venture.

The security situation has been helped by the deployment of peace-keeping forces from Rwanda and other security personnel to tackle Islamic insurgents.

The chief executives of TotalEnergies and the other LNG project lead-developer in Mozambique, Eni of Italy, had recently visited the east African state of Rwanda and thanked the government for its Mozambican peace-keeping efforts.

TotalEnergies declared “force majeure” on the venture in April 2021 over the growing conflict in Mozambique's northern Cabo Delgado province.

The French major had already reduced the workforce to a bare minimum at the liquefaction plant site on the Afungi Peninsula, near the port of Pemba.

This followed a flare up at the end of March 2021 in the fighting in the region linked to an Islamist insurgency near the border with Tanzania.

“We are looking at the situation and, the steps taken by the Mozambican government are going in the right direction,” said Henri-Max Ndong Nzue, the TotalEnergies Senior Vice President for Africa.

Improvements

“Things are improving by what we can see on the ground. The African forces are doing quite a good job,” he added.

The instability has already pushed back the start of first production to at least 2025 from 2024, with full output of just over 13 million tonnes per annum expected in 2026.

TotalEnergies has continually expressed its “solidarity” with the government and people of Mozambique in being able to end the violence and restore security and stability in Cabo Delgado province in the longer term.

The Total-led project includes the development of the Golfinho and Atum gas fields located within offshore Area 1 of Mozambique’s Rovuma Basin.

The liquefaction plant site had already been cleared for construction when Total acquired it from Occidental Petroleum in an almost $4 billion deal in November 2019 for a 26.5 percent operated interest previously held by Anadarko Petroleum.

Total had initially planned to build two liquefaction Trains, each with capacity of 6.45 million tonnes power annum, and with the possibility of up to two additional Trains and overall output of 25 MTPA.

The Rovuma Basin Area 1 licence has estimated resources of more than 60 trillion cubic feet of gas resources of which 36 Tcf could be developed for a four-Train plant.

The Area 1 shareholders in addition to Total include Mozambican state-owned energy company ENH with 15 percent and five other companies

They are Japan’s Mitsui & Co. with a 20 percent stake, three Indian companies, ONGC Videsh, Bharat PetroResources and Beas Rovuma Energy each holding 10 percent and Thailand’s PTTEP with 8.5 percent.

TotalEnergies of France said it benefited from a leading position in liquefied natural gas to generate $4.8 billion in adjusted third-quarter net income versus $848 million in the 2020 quarter while cash flow amounted to $8.4Bln.