ENGIE announced the agreement with Total for the sale of its upstream and midstream LNG activities, liquefaction, shipping and international LNG trading. Additionally, Total and Engie will cooperate to promote the use of biogas and renewable hydrogen.
The agreement complies with ENGIE’s strategy to reduce its exposure to commodity prices. It also completes the Group’s action plan to move away from upstream oil and gas activities, Engie said in a statement.
Following the transaction, Total will take over the teams in charge of the LNG activities at Engie, which represents around 180 employees.
Furthermore, Engie noted that it will remain committed to its downstream activities, its retail sales, its GTT subsidiary and the Group’s regasification terminals in France, the United States and Chile.
The transaction will amount to an aggregate value of $2.04 billion, including an earn-out of up to 550 million US dollars, payable under certain conditions, according to Engie.
“This intended transaction demonstrates once again ENGIE’s ability to deliver on its transformation plan and to improve its risk profile by reducing its exposure to commodity prices. ENGIE is nonetheless accelerating its development in its LNG downstream activities, notably in the regasification domain and the supply of LNG to its end customers. Furthermore, ENGIE is convinced that green gases are a key element to the energy revolution and further materialises its lead in this area by becoming Total’s preferred supplier”, said Isabelle Kocher, ENGIE Chief Executive Officer.
The intended transaction is expected to be completed during 2018.
Lastly, Total and Engie agreed to cooperate to promote the use of biogas and renewable hydrogen, for an initial 10-year period partnership, with Engie becoming Total’s priority supplier in this field, the two companies mentioned.