Long Term LNG Sales in Türkiye: TotalEnergies Will Supply 1.1 Million Tons Per Year to BOTAŞ for 10 Years

Rhea-AI Summary

TotalEnergies (TTE) has signed a Heads of Agreement (HoA) with BOTAŞ to supply 1.1 million tons of LNG per year for 10 years, starting from 2027. This long-term agreement strengthens TotalEnergies' presence in the Turkish LNG market and helps secure long-term sales while reducing exposure to spot market gas price fluctuations. As the world's third-largest LNG player, TotalEnergies aims to increase natural gas in its sales mix to nearly 50% by 2030, focusing on reducing carbon emissions and eliminating methane emissions in the gas value chain.

Positive

• Secured long-term LNG sales agreement with BOTAŞ for 1.1 million tons per year
• 10-year contract duration provides stable revenue stream starting from 2027
• Strengthens TotalEnergies' presence in the Turkish LNG market
• Reduces exposure to spot market gas price fluctuations
• Aligns with company's strategy to grow long-term LNG sales

Negative

• None.

Insights

Financial Analyst

This long-term LNG supply agreement between TotalEnergies and BOTAŞ is a strategic move that enhances TotalEnergies' position in the global LNG market. The 10-year contract for 1.1 million tons per year provides stable revenue and reduces exposure to volatile spot prices. This deal aligns with the company's goal to increase natural gas in its sales mix to 50% by 2030, potentially boosting investor confidence in its long-term strategy. However, the financial impact may be as it represents only about 2.5% of TotalEnergies' current LNG portfolio. Investors should consider how this fits into the broader energy transition and the company's ability to balance long-term contracts with market flexibility.

Energy Market Analyst

This agreement signifies TotalEnergies' commitment to expanding its LNG presence in strategic markets. Türkiye, as a growing energy consumer and a gateway between Europe and Asia, offers significant potential for LNG demand growth. The deal with BOTAŞ, a state-owned company, provides political and economic stability to the contract. It's worth noting that this agreement comes at a time when Europe is diversifying its energy sources, making Türkiye an increasingly important energy hub. The 10-year duration of the contract also aligns with the expected transition period where natural gas will play a important role in balancing renewable intermittency and reducing coal usage in power generation.

Environmental Policy Expert

While this deal supports TotalEnergies' transition strategy, it raises questions about long-term commitment to fossil fuels. Natural gas, though cleaner than coal, still contributes to greenhouse gas emissions. The company's focus on eliminating methane emissions and reducing carbon in the gas value chain is positive, but investors should monitor progress on these goals. The 10-year contract duration extends beyond many countries' net-zero targets, potentially exposing TotalEnergies to future regulatory risks. However, if the company can demonstrate that this LNG supply is displacing more carbon-intensive energy sources in Türkiye, it could align with broader decarbonization efforts. Balancing energy security and environmental goals will be important for TotalEnergies' long-term success.

PARIS--(BUSINESS WIRE)-- Regulatory News:

In line with its strategy to grow its long-term liquefied natural gas (LNG) sales, TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) announces the signing of a Heads of Agreement (HoA) with BOTAŞ for the delivery of 1.1 million tons of LNG per year for ten years starting from 2027.

This agreement allows TotalEnergies to strengthen a long-term presence in the Turkish LNG market. Natural gas plays a crucial role as a transition energy, addressing the intermittency of renewable energy sources and reducing emissions by replacing coal in electricity generation.

“We are pleased to initiate a new long-term collaboration with BOTAŞ, a key partner for the Company in Türkiye. This agreement enables us to secure long-term sales and reduce our exposure to spot market gas price fluctuations,” said Gregory Joffroy, Senior Vice President, LNG at TotalEnergies.

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TotalEnergies, the world’s third largest LNG player
TotalEnergies is the world’s third largest LNG player with a global portfolio of 44 Mt/y in 2023 thanks to its interests in liquefaction plants in all geographies. The Company benefits from an integrated position across the LNG value chain, including production, transportation, access to more than 20 Mt/y of regasification capacity in Europe, trading, and LNG bunkering. TotalEnergies’ ambition is to increase the share of natural gas in its sales mix to close to 50% by 2030, to reduce carbon emissions and eliminate methane emissions associated with the gas value chain, and to work with local partners to promote the transition from coal to natural gas.

About TotalEnergies
TotalEnergies is a global integrated energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to provide as many people as possible with energy that is more reliable, more affordable and more sustainable. Active in about 120 countries, TotalEnergies places sustainability at the heart of its strategy, its projects and its operations.

@TotalEnergies TotalEnergies TotalEnergies TotalEnergies

Cautionary Note
The terms “TotalEnergies”, “TotalEnergies company” or “Company” in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies’ financial results or activities is provided in the most recent Universal Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC).

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TotalEnergies

Media Relations: +33 (0)1 47 44 46 99 l presse@totalenergies.com l @TotalEnergiesPR

Investor Relations: +33 (0)1 47 44 46 46 l ir@totalenergies.com

Source: TotalEnergies SE

FAQ

What is the quantity and duration of TotalEnergies' LNG supply agreement with BOTAŞ?

TotalEnergies has agreed to supply 1.1 million tons of LNG per year to BOTAŞ for a duration of 10 years, starting from 2027.

How does the LNG agreement with BOTAŞ benefit TotalEnergies (TTE)?

The agreement strengthens TotalEnergies' long-term presence in the Turkish LNG market, secures long-term sales, and reduces the company's exposure to spot market gas price fluctuations.

What is TotalEnergies' (TTE) position in the global LNG market?

TotalEnergies is the world's third-largest LNG player with a global portfolio of 44 Mt/y in 2023, benefiting from an integrated position across the LNG value chain.

What is TotalEnergies' (TTE) goal for natural gas in its sales mix by 2030?

TotalEnergies aims to increase the share of natural gas in its sales mix to close to 50% by 2030, focusing on reducing carbon emissions and eliminating methane emissions in the gas value chain.