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TotalEnergies Inks a 10-Year LNG Supply Deal With BOTAS
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TotalEnergies SE (TTE - Free Report) announced that it has signed a Heads of Agreement with BOTAS for delivering 1.1 million tons per year (Mtpa) of liquefied natural gas (LNG - Free Report) for 10 years. It will start delivering from 2027.
This agreement is in sync with TotalEnergies’ strategy to grow its long-term LNG sales. Through this deal, TTE can fortify its long-term position in the Turkish LNG market. It should also enable the company to reduce its exposure to spot market gas price fluctuations.
Natural gas is an essential source that should assist Utilities in their energy transition. Since natural gas is replacing coal in the production of electricity, it can help reduce emissions and mitigate the intermittent nature of renewable energy sources.
TTE’s Primary Goal in the LNG Chain
TotalEnergies benefits from an integrated position across the LNG value chain, including production, transportation, access to more than 20 Mtpa of regasification capacity in Europe, trading and LNG bunkering.
The company’s global LNG portfolio was 44 Mtpa in 2023, owing to its interests in liquefaction plants in all geographies. The company continues to expand its LNG operation through acquisitions, partnerships and agreements. Its large fleet of LNG tankers and reserved capacity in several regasification terminals make it a perfect partner for the development of LNG projects globally.
TTE’s expanding LNG operation is in sync with its long-term ambition to increase the share of natural gas in its sales mix to nearly 50% by 2030, reduce carbon emissions and eliminate methane emissions associated with the gas value chain.
Expanding LNG Market
According to an Institute for Energy Economics and Financial Analysis report, the global LNG market is set to witness an unprecedented wave of new liquefaction projects coming online in late 2024. This will be the fastest capacity growth in the global LNG industry, representing a 40% increase in just five years.
The sector is poised to increase its liquefaction capacity nearly five times during 2025-2028 compared with the preceding four-year span.
Along with TTE, the rising demand for LNG should also boost the prospects of companies like Cheniere Energy (LNG - Free Report) , Shell plc (SHEL - Free Report) and BP plc (BP - Free Report) , as these play a vital role in the supply of LNG worldwide. These companies are committed to ensuring access to a reliable and affordable source of energy as it transitions to a cleaner future.
In July 2024, TotalEnergies, Shell, BP and Abu Dhabi National Oil Company (“ADNOC”) collaborated for the Ruwais LNG project in Abu Dhabi. ADNOC has a 60% interest in the project, with TTE, Shell, BP and Mitsui holding 10% each.
Two liquefaction trains with a combined capacity of 9.6 Mtpa are part of the project, which is anticipated to be launched in the second half of 2028. Its full-electric liquefaction trains will be supplied with clean power by the UAE’s grid, making it one of the world’s lowest-carbon-intensity LNG plants.
The Zacks Consensus Estimate for Cheniere’s 2024 sales indicates a year-over-year decrease of 25.4%. The company delivered an average earnings surprise of 55.9% in the trailing four quarters.
SHEL’s long-term (three to five year) earnings growth rate is 5.14%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 2.9%.
BP’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for 2024 sales indicates a year-over-year increase of 7.8%.
TTE’s Stock Price Performance
In the past three months, shares of TotalEnergies have risen 2.3% against the industry’s 2.9% decline.
TotalEnergies SE (TTE - Free Report) announced that it has signed a Heads of Agreement with BOTAS for delivering 1.1 million tons per year (Mtpa) of liquefied natural gas (LNG - Free Report) for 10 years. It will start delivering from 2027.
This agreement is in sync with TotalEnergies’ strategy to grow its long-term LNG sales. Through this deal, TTE can fortify its long-term position in the Turkish LNG market. It should also enable the company to reduce its exposure to spot market gas price fluctuations.
Natural gas is an essential source that should assist Utilities in their energy transition. Since natural gas is replacing coal in the production of electricity, it can help reduce emissions and mitigate the intermittent nature of renewable energy sources.
TTE’s Primary Goal in the LNG Chain
TotalEnergies benefits from an integrated position across the LNG value chain, including production, transportation, access to more than 20 Mtpa of regasification capacity in Europe, trading and LNG bunkering.
The company’s global LNG portfolio was 44 Mtpa in 2023, owing to its interests in liquefaction plants in all geographies. The company continues to expand its LNG operation through acquisitions, partnerships and agreements. Its large fleet of LNG tankers and reserved capacity in several regasification terminals make it a perfect partner for the development of LNG projects globally.
TTE’s expanding LNG operation is in sync with its long-term ambition to increase the share of natural gas in its sales mix to nearly 50% by 2030, reduce carbon emissions and eliminate methane emissions associated with the gas value chain.
Expanding LNG Market
According to an Institute for Energy Economics and Financial Analysis report, the global LNG market is set to witness an unprecedented wave of new liquefaction projects coming online in late 2024. This will be the fastest capacity growth in the global LNG industry, representing a 40% increase in just five years.
The sector is poised to increase its liquefaction capacity nearly five times during 2025-2028 compared with the preceding four-year span.
Along with TTE, the rising demand for LNG should also boost the prospects of companies like Cheniere Energy (LNG - Free Report) , Shell plc (SHEL - Free Report) and BP plc (BP - Free Report) , as these play a vital role in the supply of LNG worldwide. These companies are committed to ensuring access to a reliable and affordable source of energy as it transitions to a cleaner future.
In July 2024, TotalEnergies, Shell, BP and Abu Dhabi National Oil Company (“ADNOC”) collaborated for the Ruwais LNG project in Abu Dhabi. ADNOC has a 60% interest in the project, with TTE, Shell, BP and Mitsui holding 10% each.
Two liquefaction trains with a combined capacity of 9.6 Mtpa are part of the project, which is anticipated to be launched in the second half of 2028. Its full-electric liquefaction trains will be supplied with clean power by the UAE’s grid, making it one of the world’s lowest-carbon-intensity LNG plants.
The Zacks Consensus Estimate for Cheniere’s 2024 sales indicates a year-over-year decrease of 25.4%. The company delivered an average earnings surprise of 55.9% in the trailing four quarters.
SHEL’s long-term (three to five year) earnings growth rate is 5.14%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 2.9%.
BP’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for 2024 sales indicates a year-over-year increase of 7.8%.
TTE’s Stock Price Performance
In the past three months, shares of TotalEnergies have risen 2.3% against the industry’s 2.9% decline.
Image Source: Zacks Investment Research
TTE’s Zacks Rank
The company currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.