(AOF) – TotalEnergies has signed a memorandum of understanding with Sempra Infrastructure, Mitsui & Co. Ltd. and Japan LNG Investment – a company jointly owned by Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha (NYK) – for the expansion of Cameron LNG, a liquefied natural gas (LNG) production and export terminal located in Louisiana, United States -United.
This extension project concerns the construction of a fourth train with a maximum production capacity of 6.75 million tonnes of LNG per year (Mtpa) and a 5% increase in the capacity of 13.5 Mtpa of first three trains by debottlenecking.
The project will also include design improvements to reduce site emissions, including the use of electrically powered compressors. Under the agreement, TotalEnergies will remove 16.6% of the production of the fourth train, and 25% of the additional production of the existing trains.
In parallel to this agreement, Cameron LNG awarded two engineering studies contracts (FEED) relating to this expansion with a view to the future selection of the company in charge of the execution contract (EPC) of the project.
“We are pleased to take this next step with our partners to increase the liquefaction capacity of Cameron LNG, a facility ideally located in the Atlantic basin for the export of LNG to Europe. TotalEnergies has become, over the past America’s leading LNG exporter, most of which has recently been exported to Europe, thus contributing to the continent’s security of energy supply.TotalEnergies is firmly committed to continuing its development in the United States, and to be able to meet the growing need for LNG, a key energy for the energy transition”, declared Patrick Pouyanné, Chairman and CEO of TotalEnergies.
“The Cameron LNG expansion will contribute to our LNG growth strategy by investing in low-cost, long-term competitive, low greenhouse gas emissions projects.”
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=/ Key points /=
– Integrated energy group, 3
th
world oil company, 2nd gas company and world number in solar energy with Sun Power;
– Business of $205 billion organized into 4 branches: 42.55% in refining & chemicals, 39% in marketing & services (distribution networks, etc.), 15% in renewables, gas and electricity, then exploration -production ;
– Economic model of transformation into a multi-energy group, producer of oil & LNG (liquefied natural gas), renewable energies & electricity and hydrogen & biomass;
– Open capital (6.4% held by employees), the 12-member Board of Directors being chaired by Patrick Pouyanné, also Chief Executive Officer;
–
Solid balance sheet with
a debt ratio of 15.3%, below the target of 20%, and $15.8 billion in free cash flow.
=/ Issues /=
– 2020-2030 strategy in response to the challenge of energy transition: more energy, – emissions:
– 30% growth in energy production, powered 50% by renewable electricity, 50% by LNG, the share of oil falling from 55% to 30%,
– change in the distribution of sales -30% petroleum products, 50% gas, 15% electricity and 5% biomass and hydrogen,
– discipline in investments – $13 to $15 billion per year over 2022-2025, of which 50% allocated to new energies – renewables and electricity – and 50% to natural gas;
– Innovation strategy with $1.1 billion, including $968 million for R&D, focused on digital and the Total Carbon Neutrality venture capital fund ($400 million cumulative 2019-2023):
– incubators for start-ups financed by the Total Energy Ventures fund,
– partnerships with research centers, such as IFPEN for CO2 capture and storage (and participation in the “3 D” CO2 capture project), CEA for the conversion of CO2 into biofuel or CNRS for chemistry and solar;
– “New climate ambition” environmental strategy drawn up in May 2020:
– carbon neutrality for the group’s operations by 2050, neutrality of the products used by customers in Europe by 2050,
reduction of 60% or more in the carbon intensity of products used by customers outside Europe by 2050
;
– achievement through a 4-axis strategy: growth in the gas value chains (natural, biogas and hydrogen), in low-carbon electricity (annual budget of $1.5 to $2 billion), in oil at a standstill low and in biofuels and, finally, in activities contributing to carbon neutrality (natural wells, forests, etc.),
– development in solar and renewables: production capacity of 25 Gw by 2025,
– partnerships, in particular with Novatek for the reduction of emissions generated by the production of liquefied natural gas;
– In renewables & electricity, capacity portfolio of 35 GW by 2025, including +20 GW secured by long-term purchase contracts;
– Industrial excellence in oil production with a breakeven point of less than $25/bbl.
=/ Challenges /=
– Sensitivity to the price of a barrel of oil and to the dollar, an increase of $10 per barrel having an impact on operating profit of $2.7 billion; a decline of $10 affecting it by $100 million;
– Exposure to geopolitical risks in Africa (30% of the group’s production), particularly in Nigeria, the Middle East -Libya and Yemen- and in Russia;
– Outlook for 2022: in a context of sustained high levels of +$90/$ in oil prices and very high gas prices in Asia and Europe, at *$20/Mbtu in 2022:
– 2% increase in hydrocarbon production, driven by the start-ups of Mero 1 in Brazil and Ikike in Nigeria, the entry into the PSCs of Atapu and Sépia in Brazil in May 2022 but impacted by asset disposals mature in 2021 and by leaving Myanmar in July,
– increase in free cash flow of $1 billion in liquefied natural gas with a sale price of +$12/Mbtu in the 1st half of 2022,
– target of +16 GW of gross renewable capacity,
– target of +25% electricity production,
– $3.5 billion in net investments in renewables and electricity, i.e. 25% of the total,
– target of +$6 billion for the free cash flow of petrochemicals and distribution, based on refining margins at $25/t;
– Dividend paid in 4 installments (€0.66 for 2021) and share buybacks for $2 billion on 1
er
semester (up to 40% of cash flow generated by hydrocarbon prices above $60/bbl).
Pressure on the oil majors to achieve carbon neutrality by 2050
About twenty institutional investors, such as Allianz or the Caisse des dépôts, have defined a climate reporting standard to assess the ability of oil and gas majors to achieve carbon neutrality objectives by 2050. These institutional investors are members of the Groupe d Investors on Climate Change (IIGCC). Companies must commit and report on their performance on a range of indicators, such as capital expenditure or governance. The implementation of these requirements will be tested with several oil and gas companies such as BP, Eni, Repsol, Shell or Total to then apply to other companies in the sector.