LNG

The Berkshire Hathaway Energy group of US investor Warren Buffett has acquired the 50 percent of the Cove Point LNG plant in Maryland it didn’t already own for $3.3 billion from US utility Dominion Energy.

Dominion had a 50 percent non-controlling limited partner interest in Cove Point LNG and this is now owned by Berkshire Hathaway Energy, which already operates the facility.

Berkshire Hathaway Energy confirmed the acquisition for $3.3Bln and said it would now own a 75 percent limited partnership stake in Cove Point LNG LP.

It added that a subsidiary of Brookfield Infrastructure Partners, the Canadian equity fund, owns the remaining 25 percent limited partnership interest in the Cove Point business.

Berkshire Hathaway Energy holds the Cove Point stake in the BHE Gas Transmission and Storage (BHE GT&S) unit, an interstate natural gas transmission and storage company headquartered in Richmond, Virginia and with operations in 10 states.

Dominion valuation

Dominion said its own total transaction value was in fact $3.5Bln inclusive of transaction proceeds of $3.3Bln and expected proceeds from the termination of related interest rate derivatives of $200 million.

“Since 2002, Cove Point has been an excellent service provider to its international and domestic customers - linking global gas supplies with American customers, and American gas supplies with customers around the world,” said Robert M. Blue, Dominion President and Chief Executive.

“However, this investment is non-core to Dominion Energy as we focus on our state-regulated utility operations,” CEO Blue added.

“The sale demonstrates our commitment to the company's credit profile and represents an attractive exit from what has been an excellent investment for our shareholders,” Blue stated.

Cove Point produces around 5.2 million tonnes per annum from a single Train and has tolling agreements with Gas Authority of India and Sumitomo Corp. and Tokyo Gas of Japan.

Earlier deal

Buffett's company agreed to acquire its initial Cove Point stake in July 2020. That deal between Dominion and Berkshire Hathaway was valued at $9.7Bln and included gas transmission and gas storage assets as well as the Cove Point stake. It also gave the Buffett company operatorship of the LNG export plant.

Buffett's company said at the time it was acquiring the Cove Point plant as it was one of only a limited number of such LNG export facilities in the US.

When agreeing to buy the Cove Point stake in July 2020 Buffett was also concluding his first big acquisition since 2015 and it happened to be in the natural gas and LNG business.

Buffett's BHE GT&S currently operates around 5,500 miles of transmission lines in the eastern US and 756 billion cubic feet of total natural gas storage, with 420 Bcf of working gas capacity. 

BHE GT&S also provides LNG solutions through another of its units called Pivotal LNG and other processing and storage ventures.

TotalEnergies posted annual net income of $16.03 billion versus losses of $7.42Bln the previous year and the earnings included a 10 percent increase in LNG sales totalling 42 million tonnes in 2021.

The company’s LNG sales for the fourth quarter jumped 16 percent to 11.2MT and the average LNG selling price was $13.12 per million British thermal units in the final three months of 2021, an increase of 44 percent compared with the third quarter.

Fourth-quarter net income came to $5.83Bln versus $847 million in the same three months of 2020.

Hydrocarbon production for LNG increased 6 percent year-on-year in the fourth quarter.

“LNG sales increased sharply on higher production from Cameron LNG in Louisiana and Freeport LNG in Texas, up 16 percent in the fourth quarter compared to a year ago and up 10 percent for full-year 2021 versus 2020,” stated the Paris-based company.

TotalEnergies also announces its decision not to sanction and to withdraw from the North Platte deepwater project in the US Gulf of Mexico.

“The decision not to continue with the project was taken as the company has better opportunities of allocation of its capital within its global portfolio,” said TotalEnergies.

TotalEnergies held a 60 percent operated interest in North Platte, alongside its joint-interest owner Equinor of Norway, which held 40 percent. .

“We have duly notified our partner and the relevant authorities of the immediate withdrawal from the project, and of its resignation as operator which will be effective following a short transition period to ensure an orderly hand-over of operatorship,” stated the company.

Brazil and Africa

TotalEnergies at the same time is increasing its presence in Brazil and Africa by entering the Brazilian Atapu and Sépia giant fields and launching the Lake Albert Resource Development Project for Uganda and Tanzania.

The French major’s annual results showed generated cash flow of $30.7Bln, which was $13Bln more than in 2020, and adjusted annual gross earnings came to $42.3bln.

“The integrated Gas, Renewables and Power segment reported adjusted net operating income of $2.8Bln and cash flow of $2.4Bln in the fourth quarter, bringing full-year results and cash flow to $6.2Bln and $6.1Bln, respectively,” said Chairman and Chief Executive Patrick Pouyanné.

“These historic results build on the globally integrated LNG portfolio, leveraging rising oil and gas prices and outperformance in the gas and LNG trading business,” he added.

“The profitable growth strategy in Renewables & Electricity continues with more than 10 gigawatts of installed gross capacity and more than 6 million electricity customers at year-end 2021,” stated the CEO.

TotalEnergies said it its 2022 outlook that it expected to continue the momentum that has been underway for several years.

“TotalEnergies is implementing its strategy of integrated growth in LNG, which will generate structural cash flow growth of $1Bln in 2022,” stated the company

“In addition, given the evolution of oil and gas prices in recent months and the lag effect on price formulas, TotalEnergies anticipates that its average LNG selling price should remain at a high level of at least $12 per MMBtu in the first half of 2022,” it added.

Venture Global, the developer of four LNG export plants in the US state of Louisiana on the Gulf Coast, has signed two more Chinese LNG supply deals and this time with units of China National Offshore Oil Corp (CNOOC) after two previous accords with China Petroleum & Chemical Corp. (Sinopec).

Cheniere Energy, the largest US LNG exporter from the Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas, said the global LNG market had strengthened significantly and it hoped to increase shipments to China as it reported mixed earnings while still posting $9.58 billion of annual revenues and shipping 391 cargoes in 2020.

Enagás, the Spanish natural gas operator and LNG terminal owner, reported an almost 15 percent rise in net profits as it enacted special working measures to keep LNG flowing at its three main regasification terminals.