LNG portfolio includes cargoes delivered ex-ship from Yamal LNG plant and Sabine Pass volumes
LNG News Editor:
Naturgy, the Spanish global utility company with LNG supplies from the US and Russia and natural gas and utility businesses in South America as well as renewables in the US and Australia, said after its fourth-quarter earnings that it would split into two separately listed companies, one focused on infrastructure and the other handling power generation.
The announcement came as the global utility company reported a more than 40 percent rise in annual net profits and an increase in gross earnings of over 7 percent.
Naturgy’s earnings statement showed annual net income soared 41.2 percent to €1.231Bln ($1.409Bln) from €872M in 2020. Gross earnings increased by 7.2 percent €3.983Bln ($4.560Bln) versus €3.714Bln in 2020.
LNG fleet owner
Naturgy’s LNG portfolio includes 2.5 million tonnes per annum of delivered ex-ship (DES) cargoes through to 2038 from the Yamal LNG plant, operated by Russia's Novatek.
Its regular long-term supplies also comes from 3.5 MTPA of free-on-board shipments from Cheniere Energy Sabine Pass plant in Louisiana.
The Madrid-based company additionally controls a fleet of 12 LNG carriers for deliveries which also come from countries like Trinidad and Nigeria.
“The year 2021 has been marked by the gradual recovery of energy demand and the significant rise of commodity prices, impacting both gas and electricity,” said Naturgy.
“This trend intensified during the second half of the year as we approached the winter season,” added the company.
International LNG earnings jumped by 80.3 percent to €357 million compared with €198M in 2020.
“As of 31 December 2021, contracted sales for LNG for 2022 and 2023-24 stood at 80 percent and 76 percent respectively,” it added.
Under Naturgy’s spin-off plans, one of the two groups will manage the development of renewable energies, the portfolio of energy customers and associated services and the conventional generation business.
The other group will bring together all businesses dedicated to the management of regulated energy distribution and transmission infrastructures.
This comprises more than 155,000 kilometres of electricity networks and 135,000 km of natural gas pipelines and 16 million connection points in six countries.
“With this project, Naturgy is making decisive progress in its transformation and comes ahead of the disruptive sector changes,” said Naturgy’s Chairman Francisco Reynés. After the earnings statement, Jon Ganuza, Head of Financial Planning and Control at Naturgy, gave more details of the company’s LNG business during a conference call on the earnings.
“I think that what we're currently seeing in the LNG business actually shows that they're ups and they're downs,” said Ganuza.
“But what we want to do is we want to remain as stable and with the highest level of visibility possible for the cash flow generation for the next few years,” added the executive.
“So I think that increasing our level of exposure to the LNG business or trying to decrease the level of the position that we have closed, would go against our main aim that we have regarding Naturgy's overall cash flow generation,” he explained.
Naturgy noted in its highlights that on the 10th of March 2021 the company, along with Italian energy major Eni and the government of Egypt, completed the agreement to amicably resolve the disputes affecting Union Fenosa Gas, the 50-50 partnership between Naturgy and ENI as majority owners of the Damietta LNG export plant located east of Alexandria in Egypt.
