Page 6 - LatAmOil Week 40

LatAmOil COMMENTARY LatAmOil

However, it still marks a major turnaround in will be in Asia, where it will substitute a lot of
Total’s thinking. Just a few years ago Pouyanne coal-fired generation. Gas will remain vital in
WHAT: described peak oil demand as merely a possibil- power generation, in industry and in residential
Total has forecast in its ity. Consumption could reach its height sooner and commercial sectors, Kristoffersen said. It
Energy Outlook that oil than 2030, Total now says, depending on the will also expand in transport, becoming a more
demand will peak in pace of decarbonisation efforts. widespread fuel for vehicles and ships.
2030, or possibly sooner, Faced with gloomier prospects for oil, Total is Even in Rupture, gas will remain an impor-
depending on the pace of not only looking to expand in renewable energy tant means of ensuring power grid stability and
decarbonisation efforts. “
but also gas, which it sees as having a much flexibility at an affordable cost, Total said. Under Even in the
WHY: stronger outlook. Gas will have an important that scenario, demand for natural gas will peak
in 2040, but consumption will continue climb- Rupture scenario,
Oil will begin to cede role in decarbonisation by displacing dirtier
market share in transport fuels, Total argues, especially as greener gases ing beyond 2050 if hydrogen and other green natural gas
to cleaner fuels, and the are adopted. gases are included in the mix.
petrochemicals sector “Oil demand will reach a plateau around “To fully play its role in the energy transition, will remain an
will undergo a transfor- 2030 and then decline slowly thereafter due to gas has to become much greener and much
mation, Total says. transport and petrochem accelerated transfor- cleaner,” Kristoffersen explained. “That will important means
mation,” Total’s president for strategy-innova- come at a cost, at least in the early years.”
WHAT NEXT: tion, Helle Kristoffersen, said. “Gas will continue In Momentum, the share of green gas will be of ensuring power
Total believes the outlook to play a key role for decades. It has a key role to limited by its higher cost and a lack of sufficient
for gas is much stronger. play in power systems, heat and in transport.” carbon regulation. Even so, it should rise to 8% grid stability and
It plans to double its LNG of total gas supply by 2050, versus 0.1% in 2018. flexibility att an
sales within the next dec- Energy outlook But in Rupture, the share of green gas will exceed
ade and focus on making Kristoffersen was discussing Total’s Energy Out- 25% within three decades. affordable cost,
gas greener.
look report published on September 29. The
company forecast continued growth in global LNG plans Total said
energy demand over the next three decades in all CEO Patrick Pouyanne outlined Total’s long-
scenarios considered, by 10-25% in total during term strategy the following day, which demon-
the period. But this extra demand will be met by strated the company’s confidence in gas.
low-carbon power. Total plans to double its LNG sales within a
Electricity’s share of final energy consump- decade, from the current 35mn tonnes per year
tion will rise from 20% currently to 30-40% by to 50mn tpy by 2025 and 70mn tpy by 2030,
2050. Pouyanne announced in a presentation. Its inte-
Total bases its predictions on two main sce- grated LNG business is expected to earn over
narios which it calls Momentum and Rupture. $4bn in cash in 2025, up 40% from the present
Both envisage Europe becoming carbon neutral annual level, assuming an average oil price of
by 2050 – the goal set in the European Green $50 per barrel.
Deal. Momentum sees countries in the rest of The global LNG market is currently experi-
the world pursuing their existing national cli- encing a glut, as a result of extra capacity coming
mate targets, as well as an aggressive deployment on stream, weaker demand in key markets last
of proven clean technologies such as electric year and the coronavirus (COVID-19) pan-
vehicles (EVs), solar, wind and biofuel. demic. But Total predicts that the market will
“Momentum goes beyond the business-as- tighten as early as 2023, owing to projects being
usual scenario; nevertheless, it fails the well-be- delayed because of current conditions.
low 2oC target globally,” Kristoffersen said. The oil major has three liquefaction projects
Rupture, on the other hand, sees all countries – the Novatek-operated Arctic LNG-2 in Russia,
pledging net-zero targets while also envisaging Mozambique LNG and a seventh train at Nige-
breakthroughs in as-yet-unproved technologies ria LNG – due online in 2023-2024. These three
such as hydrogen, synthetic fuels and carbon schemes, all of which have been sanctioned
capture. This will enable them to be developed already, will capture a share of the improved
at scale to cut emissions. As such, global temper- market.
ature growth will be limited at 1.5-1.7oC. “We are in a good position to benefit from the
While primary energy consumption will evolution of the LNG market,” Pouyanne said,
climb by 0.6% annually in Momentum, it rises adding that Total would not need acquisitions
by only 0.4% per year in Rupture. to realise its growth goals. “We will not spend a
Solar and wind power will see a rapid expan- lot on M&A in the next 10 years because we have
sion in usage in both scenarios, being deployed what we need in our hands.”
at a rate of more than 200 GW per year in The CEO noted Total had access to addi-
Momentum and over 500 GW per year in Rup- tional undeveloped resources in Mozambique,
ture. The share of EVs in transport will also soar and options to expand the Cameron LNG ter-
to 60% in Momentum and 75% in Rupture, minal in the US and the Papua LNG facility in
compared with the current 1%. Carbon capture Papua New Guinea.
and storage (CCS) capacity will also be scaled up
to 2,000-7,500 gigatonnes per year. Other areas
Gas will primarily seize market share away Total has also made new commitments as
from coal and oil. In Momentum, its consump- part of its decarbonisation efforts. It is now tar-
tion will increase by 1.3% annually and reach 5.7 geting a 30% cut to the Scope 3 emissions of its
trillion cubic metres by 2050. Its biggest gains European customers within the next decade.

P6 www. NEWSBASE .com Week 40 08•October•2020