Total plans to expand LNG business by 2020 while exiting coal
By TARA PATEL
Bloomberg
Total plans to raise production and trading of liquified natural gas (LNG) by 2020 and pull out of coal mining as part of a new policy on fossil fuels and climate change.
“Total is gas and gas is good,” CEO Patrick Pouyanne said Monday in Paris. The company plans to produce and trade about 32.5 million metric tons of LNG at the turn of the decade compared with about 18.5 million tons currently. Total also intends to charter a dozen LNG tankers for future trading, two of them currently under construction.
The targets could be achieved by completing projects in Australia, Russia and elsewhere while trading shale gas exports from the US, where prices are expected to stay relatively low for the coming years, Pouyanne said at a news conference. Deals to boost supplies are possible though not “essential.”
Pouyanne made his remarks ahead of the World Gas Conference this week when promoters are expected to highlight the energy as the cleanest burning fossil-fuel compared with coal and oil. Gas production is expected to grow almost everywhere but Europe by 2040, the International Energy Agency said in November. LNG exports will almost double, taking market share from pipelines, according to the Paris-based adviser to 29 developed countries.
“There will be a profound change in the world energy mix,” Pouyanne said Monday. Total will produce more natural gas than crude in the future compared with a 50-50 ratio this year. Total’s gas projects under development include Yamal LNG in the Russian Arctic and in Papua New Guinea.
‘Get Out’
“I still have a coal business and I have to get out of it,” he said. “I can’t say that coal is the enemy of gas and then continue to produce coal like some of my colleagues. I will get out of coal.”
Total marketed 8.5 million metric tons of coal on the international market last year, at least 70% of it from South Africa, according to its latest annual report. Almost three-quarters of the coal was sold in Asia, the rest to Europe.
Total last year agreed to sell its Total Coal South Africa unit, which produced 3.3 million tons in 2014, to Exxaro Resources, and is waiting for regulators in that country to approve the deal, according to Total’s head of gas, Laurent Vivier.
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