French major Total outlines strategy underpinned by natural gas development and LNG production

Tuesday, 06 October 2020
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LNG News Editor: 

European oil and gas major Total said its liquefied natural gas sales would reach 50 million tonnes per annum by 2025 and would double between 2020-2030, creating value from scale, arbitrage and integration along the value chain.

The French company’s LNG and over strategy were outlined in a presentation to investors in Paris involving senior executives led by Patrick Pouyanné, Chairman and Chief Executive.

Spending cut

“Cash-flow from the integrated LNG business shall grow by 40 percent to more than $4 billion in 2025 based on a $50 a barrel crude price,” explained Pouyanné

The French group, which cut its annual spending to $12 billion from $15 billion to tackle the Covid-19 impacts, said its growth would be underpinned by natural gas production and LNG liquefaction in the coming years.

The French operator has stakes in the Russian Yamal LNG and Arctic LNG II projects as well as the Ichthys LNG and Gladstone LNG plants in Australia. It also has long-standing LNG shareholdings in nations such as Nigeria.

Total's priority project at present is the Mozambique onshore LNG project at Cabo Delgado acquired from Occidental Petroleum on its takeover of US peer Anadarko.

Total additionally has US volumes from the Cameron plant in Louisiana operated by Sempra Energy and from Sempra’s planned project at Costa Azul in Mexico.

The company outlined to analysts its policies in regard to supporting measures to slow climate change and carbon-dioxide emissions.

“Decarbonizing natural gas with biogas and hydrogen as well as continuing to reduce methane emissions will contribute to Total’s climate ambition,” said CEO Pouyanné.

“Total will also focus on low cost oil projects, privileging value over volume and develop its portfolio of oil projects, all with profitability above 15 percent at $50 a barrel, while ensuring consistency for Capex allocation with climate measures,” he added.

The company would focus in turn on adapting energy sales to market evolution and engaging in the mobility revolution.

Total is one of the main participants among oil majors in the development of LNG fuel for vehicles and bunkering for shipping.

It also intends to adapt its refining capacity and sales to demand, particularly in Europe.

“In the same time, we will further increase our biofuels production and sales as demand for such renewable products is supported by policies aiming to get to Net Zero. Renewable diesel production is expected to reach more than 2 million tonnes a year by 2025,” said the CEO.

The group is committing more than $1 billion over the next 10 years to the e-mobility revolution by investing in battery manufacturing and Electric Vehicle charging with a target of 150,000 charge points by 2025.

Total aims to have 35 gigawatts in gross renewable energy production capacity by 2025, up from a previous target of 25GW, and said 70 percent of that was already accounted for, including through projects under construction.

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