Total has signed an agreement with Engie for the acquisition of its upstream and midstream LNG assets for an aggregate value of US$2.04bn, of which an overall enterprise value of US$1.49bn and an earn-out of US$550m payable under certain conditions. The assets included in the sale are namely: Engie`s liquefaction, shipping (including the Gazocean subsidiary) and international LNG trading activities. Engie will however retain its downstream activities of which the regasification infrastructures, and LNG retail end-customer sales.
Total will get access to 2.5 Mt/year of current liquefaction capacity and participating interests in liquefaction plants projects, which are expected to raise its liquefaction capacity to 23 Mt/year by 2020: a 16.6% stake in the 13.5 Mt/year Cameron LNG liquefaction plant (United States), where three trains are currently under construction (two further trains are under consideration) along with a 5% equity stake in the first train of the Idku LNG plant (Egypt). Total will also gain access to regasification capacities of 14 Mt/year across Europe, on top of its current 4 Mt/year capacity. Besides, Total will also strengthen its portfolio of long-term LNG purchase and sale contracts, which will raise its overall LNG supply portfolio to 28 Mt/year by 2020. The group will also consolidate Engie`s fleet of 10 LNG tankers with its 3 LNG carriers.
The transaction could be finalized during 2018 and once completed, it would allow Total to hit an overall volume of around 40 Mt/year of LNGby 2020. This is expected to make Total the second largest global player among the majors with a worldwide market share of 10%.
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