Total has completed the acquisition of Engie's upstream 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 in case of an improvement in the oil markets in the coming years. The assets included in the sale are namely: Engie's liquefaction, shipping (including the Gazocean subsidiary) and international LNG trading activities.
The transaction allows Total to hit an overall volume of around 40 Mt/year of LNG by 2020 and makes the group the second largest global player among the majors with a worldwide market share of 10%. Total gets 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 also gains 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.
Engie retained its downstream activities of which the regasification infrastructures (Total will gain access to these LNG import capacities and will be a key LNG supplier for the European market), along with LNG retail end-customer sales.