Total takes over Toshiba’s U.S. LNG business

Image courtesy of Freeport LNG

French energy major Total has signed an agreement with Toshiba to take over its U.S. liquefied natural gas (LNG) portfolio.

Total said last Saturday that Toshiba’s portfolio includes a 20-year tolling agreement for 2.2 million tonnes per annum (mtpa) of LNG from Freeport LNG train 3 in Texas and the corresponding gas transportation agreements on the pipelines feeding the terminal.

The company added that Train 3 of the Freeport LNG plant was expected to start commercial operations by the second quarter of 2020.

Under the transaction, Total will acquire all the shares of Toshiba America LNG corporation for a consideration of $15 million to be paid by Total to Toshiba and will be assigned all contracts related to their LNG business by Toshiba Energy Systems and Solutions Corp. for a consideration of $815 million to be paid by Toshiba to Total.

Total will, therefore, receive from Toshiba a net cash consideration of $800 million payable at the closing date. The transaction is expected to close by the end of 2019.

Toshiba announced the sale of it US LNG business back in November 2018. At the time, the company did not disclose the name of the buyer stating that it would transfer its U.S portfolio to a “third-party buyer.”

Philippe Sauquet, president of gas, renewables, and power at Total, said: “The takeover of Toshiba’s LNG portfolio is in line with Total’s strategy to become a major LNG portfolio player.

Adding 2.2 Mtpa of LNG to our existing positions in the US, in particular, Cameron LNG, will enable optimizations of the supply and operations of these LNG sources. Already an integrated player in the US gas market, Total is set to become one of the leading US LNG exporters by 2020 with a 7 Mtpa portfolio.

Overall, Total has an LNG portfolio of around 40 mtpa by 2020 and a worldwide market share of 10 percent.

With 21.8 million tonnes of LNG sold in 2018, the company has diversified positions across the LNG value chain.

Through its stakes in liquefaction plants located in Qatar, Nigeria, Russia, Norway, Oman, Egypt, the United Arab Emirates, the United States, Australia, Angola and Yemen, Total sells LNG in all global markets.

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