French oil major Total announced the closing of the acquisition of compatriot Engie’s portfolio of upstream liquefied natural gas (LNG) assets for an overall enterprise value of $1.5 billion. This transaction makes Total the second largest global LNG player, the company claimed.
This portfolio includes participating interests in liquefaction plants, notably the interest in the Cameron LNG project in the US, long term LNG sales and purchase agreements, an LNG tanker fleet as well as access to regasification capacities in Europe.
Additional payments of up to $ 550 million could be payable by Total in case of an improvement in the oil markets in the coming years.
Acquiring Engie’s LNG business is a real step change for Total allowing us to leverage size and flexibility in the fast growing and increasingly commoditized LNG market. This transaction makes Total the second largest global LNG player among the majors with a worldwide market share of 10% and the Group will manage an overall LNG portfolio of around 40 Mt per year by 2020. It also helps us to build a position in the US LNG market, with the 16.6% stake in the Cameron LNG project,
…commented Patrick Pouyanné, Chairman & Chief Executive Officer of Total.
Following the transaction, Total takes over the teams in charge of the upstream LNG activities at Engie.
The agreement, announced back in November 2017, is in line 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 explained in a statement.
The company added 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.
