Page 14 - GLNG Week 40

GLNG COMMENTARY GLNG

Total plans to double
its LNG sales within
a decade, from the
current 35mn tonnes
per year to 50mn tpy
by 2025 and 70mn tpy
by 2030.

But in Rupture, the share of green gas will exceed Pouyanne explained. “The time is right to accel-
25% within three decades. erate growth in low carbon. The real risk is not
participating in the transition and being left
LNG plans behind.”
CEO Patrick Pouyanne outlined Total’s long- Total wants to ramp up its overall energy
term strategy the following day, which demon- production from 3 to 4mn barrels of oil equiv-
strated the company’s confidence in gas. alent per day (boepd) with increased LNG and
Total plans to double its LNG sales within a mostly renewable electricity generation. It wants
decade, from the current 35mn tonnes per year to expand investments in renewables and gen-
to 50mn tpy by 2025 and 70mn tpy by 2030, eral power from $2bn to $3bn annually, so that
Pouyanne announced in a presentation. Its inte- they represent more than 20% of its total capital
grated LNG business is expected to earn over spending.
$4bn in cash in 2025, up 40% from the present Total is targeting 50 TWh of net power gener-
annual level, assuming an average oil price of $50 ation and 80 TWh of sales by 2025 from gas-fired
per barrel. power and renewables. It is striving to become a
The global LNG market is currently experi- “world leader” in renewables, with plans to have
encing a glut, as a result of extra capacity coming 35 GW of gross capacity in operation by 2025. It
on stream, weaker demand in key markets last will add 10 GW per year beyond that point.
year and the coronavirus (COVID-19) pan- Oil and gas production will be vital for
demic. But Total predicts that the market will funding these investments, although Total
tighten as early as 2023, owing to projects being will work to decarbonise its gas by developing
delayed because of current conditions. biogas and hydrogen production, Pouyanne
The oil major has three liquefaction projects said. The company also plans to scale back its
– the Novatek-operated Arctic LNG-2 in Rus- oil product sales, partially replacing them with
sia, Mozambique LNG and a seventh train at sales of biofuels.
Nigeria LNG – due online in 2023-2024. These Total recently announced it would convert its
three schemes, all of which have been sanctioned 93,000 barrel per day (bpd) Grandpuits oil refin-
already, will capture a share of the improved ery near Paris to produce biofuel and bioplastics.
market. Meanwhile, it does not intend to build any new
“We are in a good position to benefit from the conventional refineries, instead scaling back
evolution of the LNG market,” Pouyanne said, its European refining capacity to better match
adding that Total would not need acquisitions to demand.
realise its growth goals. “We will not spend a lot Europe’s refining sector has struggled with Total had access
on M&A in the next 10 years because we have overcapacity for years, especially in France. The
what we need in our hands.” COVID-19 pandemic has put unprecedented to additional
The CEO noted Total had access to additional pressure on the sector, however, and will likely undeveloped
undeveloped resources in Mozambique, and spur rationalisation.
options to expand the Cameron LNG terminal While the oil industry is set to reach its peak resources in
in the US and the Papua LNG facility in Papua in just 10 years, Total will continue advancing
New Guinea. low-cost oil projects that are resilient to price Mozambique, and
volatility, Pouyanne said. He said the Middle
Other areas East and North Africa offered the lowest costs, options to expand
Total has also made new commitments as part and would therefore be Total’s main focuses for the Cameron LNG
of its decarbonisation efforts. It is now targeting upstream opportunities.
a 30% cut to the Scope 3 emissions of its Euro- “Oil and gas is the engine of the energy tran- terminal in the
pean customers within the next decade. It has sition,” he said. “Oil and gas will continue to
also pledged to lower the Scope 3 emissions of its receive a major part of [investment] because we US and the Papua
customers elsewhere to under the level in 2015. need to deliver cash flow from oil and gas to fund
These goals build on the promise it made in May the growth we want to deliver in renewables and LNG facility.
to bring its Scope 1, 2 and 3 emissions to net zero electricity,” he said.
in Europe by 2050, and slash emissions in the rest Capital spending will be capped at a “cau-
of the world by 60%. tious” $12bn in 2021, versus $14bn this year, but
“We want to transform Total to meet a dual will climb to $13-16bn annually between 2022
challenge – more energy and less carbon,” and 2025, Pouyanne said.™

P14 www. NEWSBASE .com Week 40 09•October•2020