09 Nov Total grabs Engie’s LNG assets in $1.5 billion deal
Total (LSE:TTA) has become the second largest owner of liquified natural gas (LNG) assets globally after scooping up state-backed French energy firm Engie’s upstream LNG assets for US$1.5 billion.
The oil major said the purchase will see it produce an overall volume of around 40 million tonnes (Mt) of LNG per year by 2020, giving it a worldwide market share of 10%, behind only Royal Dutch Shell.
Chairman and chief executive officer Patrick Pouyanné said: “The acquisition of Engie’s upstream LNG business enables Total to accelerate the implementation of its strategy to integrate along the full gas value chain, in an LNG market growing strongly at 5% to 6% per year.”
The transaction is expected to close in 2018 and could include additional payments of up to $550 million depending on an improvement in the oil markets over the coming years.
The global LNG industry continues to grow as oil majors turn towards the cleaner gas in favour of oil and coal. This transition is exemplified by the expectation that supplies of LNG will increase by 50% between 2014 and 2021.