Total Says Company in Talks to Buy Engie LNG Assets

Total SA is in discussions about buying liquefied natural gas assets from former French gas monopoly Engie SA, the energy major’s chief executive officer has said.

Gas markets will grow in the future and Total is determined to expand its LNG business, CEO Patrick Pouyanne said on the 24^th October in Riyadh. His remarks confirmed a statement from Engie, which is seeking to sell parts of its LNG business as a glut of the fuel on global markets wipes out profitability.

“Total is a big player in LNG,” Mr Pouyanne said. “I can confirm we’ve discussed with Engie, like other companies, and we’ll see if we can find an agreement. If not, we have other ideas, other opportunities, to develop the LNG business.”

LNG is gas which is super-cooled into a liquid which specialised ships transport to buyers beyond the reach of pipelines. Engie has begun a strategic review of its upstream and midstream LNG operations, which include liquefaction, transport and international trading, the company said on the 23^rd October.

Total, which signed a contract with Iran in July to develop the country’s giant South Pars gas field, will stay on course with the project in spite of US President Trump’s opposition to the nuclear deal which made it possible, Mr Pouyanne said. Iran holds the world’s largest gas reserves, estimated by BP at 1,183 trillion cubic feet, or almost four times the amount held by the US

‘Legal Conditions’

“I still continue to believe that Iran is a very large market,” he said. “If the legal conditions allow us to do it, we will maintain the development of that project.”

In oil markets, the re-balancing of supply and demand will take time, and “that’s why we need to have a constant policy by OPEC and non-OPEC countries,” Mr Pouyanne said. The Organisation of Petroleum Exporting Countries and allied producers such as Russia are currently debating whether to extend their output-cuts agreement, which is set to expire in March.

Mr Pouyanne said he has “no idea” where crude oil prices will range in the future. He has told his staff to prepare scenarios for oil at three different prices — US$40, US$50, and US$60 a barrel. “So my range is quite big.”

Benchmark Brent crude was 33 cents higher at US$57.70 a barrel in London at 2:18 p local time.

Total’s shares traded 0.6 percent higher at €46.38 in Paris.