Total has signed an agreement with Engie to acquire its portfolio of upstream liquefied natural gas (LNG) assets for an overall enterprise value of USD1.49 billion. This portfolio includes participating interests in liquefaction plants, notably the interest in the Cameron LNG project in the U.S., 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 USD550 million could be payable by Total in case of an improvement in the oil markets in the coming years.
“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 combination of these two complementary portfolios will allow the group to manage an overall volume of around 40 million tonnes of LNG per year by 2020, making Total the second largest global player among the majors with a worldwide market share of 10%,” said Patrick Pouyanné, chairman and CEO of Total.
“With the equity stake in the Cameron LNG project, Total will also become an integrated player in the U.S. LNG market, where the group is already a gas producer.”
The proposed transaction is subject to the applicable legally required consultation and notification processes with employee representatives, as well as approvals by the relevant regulatory authorities and partners on certain contracts.
The transaction is expected to close by mid-2018 and will have an effective date of January 1, 2018.