Engie considers future of its LNG unit

Photo courtesy of Engie.

(Reuters) French gas and power group Engie is considering the future of its LNG business, which could lead to a reorganization and maybe a sale, according to the firm's CGT union.

Earlier this year, Engie set a target to sell $16.8 B worth of assets in 2016-18, potentially including oil and gas exploration and production businesses which have been hit by low energy prices.

"Management is thinking about the future of LNG," said Yves Ledoux, CGT central coordinator at Engie.

He said while he was not aware of management plans, the union expected a reorganization and possibly a sale.

The firm's Global Energy Management and LNG division, hit by lower oil and gas prices and lower volumes of gas sales, saw turnover fall 47% in the first half and made a loss before interest, tax, depreciation and amortization of $43.5 MM.

French newsletter L'Expansion reported Engie was set to book a full-year loss at this business.

It also reported that Engie planned to cut about 1,150 jobs in various functions. It said Engie intended to cut 20% of its support functions in France, including 600 jobs at its call centers, 250 sales positions, 200 IT positions and possibly about 100 jobs in its trading division.

The LNG industry in Europe is suffering due to low gas prices and overcapacity at LNG terminals.

In June, the CGT said almost 10,000 jobs were at risk at Engie over the next three years due to the utility's cost-cutting plans, which Engie has denied.

At the end of last year, Engie employed 155,000 staff globally, including 74,000 in France.

The company said at the start of the year it wanted to cut costs by $1.1 B by 2018.

 

Reporting by Benjamin Mallet and Geert De Clercq; Editing by Brian Love and Mark Potter

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