Total SA has agreed to acquire LNG assets from Engie SA for as much as $2.04 billion. The deal includes interests in liquefaction plants, long-term LNG sales and purchase agreements, an LNG tanker fleet, and access to regasification capacities.
The deal represents an overall enterprise value of $1.49 billion with possible further payments of $550 million if oil markets continue to improve in the coming years.
Total is acquiring 2.5 million tonnes/year of liquefaction capacity with 16.6% interest in the Cameron LNG liquefaction facility in Louisiana-where three trains are currently under construction and two more can be added-as well as 5% stake in the first train of the Idku LNG project in Egypt.
The company will inherit a portfolio of long-term LNG purchase and sale contracts, with supply from Algeria, Nigeria, Norway, Russia, Qatar, and the US and outlets balanced between Europe and Asia.
Total also will add a fleet of 10 LNG tankers to its three existing carriers as well as access to regasification capacities totaling 14 million tpy in Europe.
Combining its overall interests in liquefaction plants and portfolio of third-party supply contracts, Total will manage 40 million tpy of global LNG volume by 2020, making it "the second-largest global player among the majors with a worldwide market share of 10%," commented Patrick Pouyanne, Total chairman and chief executive officer.
"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 5-6%/year," Pouyanne said. "With the equity stake in the Cameron LNG project, Total will also become an integrated player in the US LNG market, where the group is already a gas producer."
The deal is effective Jan. 1, 2018, and expected to close by mid-2018. After it closes, Total will take over 180 LNG-related personnel from Engie, which said it will continue to accelerate development of its LNG downstream activities, notably in regasification and supply to its end customers.
