TotalEnergies Increases LNG Deliveries to Asia with Two New Medium and Long-Term Contracts
TotalEnergies (TTE) announced two significant LNG contracts in Asia. The first is a sales and purchase agreement (SPA) with Indian Oil (IOCL) to deliver up to 800,000 tons of LNG annually to India for ten years starting in 2026. The second is a heads of agreement (HoA) with Korea South-East Power to deliver up to 500,000 tons of LNG annually to South Korea for five years starting in 2027. These contracts enhance TotalEnergies' LNG supply portfolio and strengthen its presence in the Asian market. TotalEnergies aims to increase the natural gas share in its sales mix to nearly 50% by 2030, supporting global decarbonization efforts.
- Signing of two new LNG contracts in Asia, one with IOCL for 800,000 tons/year for 10 years starting 2026, and another with Korea South-East Power for 500,000 tons/year for 5 years starting in 2027.
- Enhanced presence in the Asian market, supporting the company's strategic growth in LNG.
- Securing medium-term outlets for TotalEnergies' global LNG supply portfolio.
- Contribution to energy security and transition in India and South Korea.
- TotalEnergies is the third largest LNG player globally with a portfolio of 44 Mt/year in 2023.
- Ambition to increase the share of natural gas in its sales mix to nearly 50% by 2030.
- Commitment to reducing carbon and methane emissions associated with the gas value chain.
- Long lead times before the contracts become effective, starting only in 2026 and 2027, which may delay any immediate financial impact.
- Potential risks associated with fluctuating LNG demand and prices in the Asian market.
- Long-term contracts may limit flexibility in adapting to future market changes or regulatory shifts.
Insights
With the signing of these two new LNG contracts, TotalEnergies is strategically enhancing its footprint in the Asian market, a region marked by rapid industrial growth and increasing energy demand. The agreement with Indian Oil Corporation (IOCL) to supply up to 800,000 tons of LNG annually for ten years and the contract with Korea South-East Power for up to 500,000 tons annually for five years, underscores TotalEnergies' commitment to solidifying its position as a key player in the LNG sector.
From a financial perspective, these long-term contracts provide TotalEnergies with stable revenue streams and reduce market volatility risk. The fixed nature of these deals ensures predictable cash flows, which can support the company’s broader strategic initiatives, such as its transition to a low-carbon energy mix. Moreover, securing such sizable contracts in Asia, a region with ambitious decarbonization goals, aligns well with TotalEnergies’ objective to increase the proportion of natural gas in its energy mix to 50% by 2030. This shift towards natural gas can help reduce carbon emissions compared to coal and oil.
For retail investors, the significance lies in TotalEnergies' ability to maintain and expand its market share in a competitive and evolving energy landscape. Strengthening ties with major players like IOCL and Korea South-East Power not only enhances revenue stability but also demonstrates the company's agility in securing key markets that are pivotal for its growth and sustainability goals.
These agreements also highlight TotalEnergies' role in the global energy transition. The company's focus on supplying LNG, which is considered a cleaner alternative to coal and oil, aligns with the environmental policies of India and South Korea, both of which are actively pursuing decarbonization strategies. This move by TotalEnergies can be seen as part of a broader trend where major energy companies are positioning themselves as facilitators of the energy transition, leveraging natural gas as a ‘bridge fuel’ to a more sustainable energy future.
For stakeholders, this underscores TotalEnergies' commitment to reducing carbon emissions and eliminating methane leaks across the LNG value chain. By partnering with local entities committed to decarbonization, TotalEnergies is likely to contribute positively to the local environmental goals, potentially enhancing its reputation and fostering stronger regulatory relationships in these regions.
For investors, this means that TotalEnergies is not only focusing on financial returns but also on long-term sustainability, which is increasingly important in today's investment landscape. A company that actively works towards reducing its environmental impact may be more resilient to regulatory risks and public scrutiny, making it a more appealing investment to those who prioritize Environmental, Social and Governance (ESG) criteria.
In line with its strategy to grow its liquefied natural gas (LNG) business, TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) announces the signing of two new LNG medium- and long-term contracts in
-
a sales and purchase agreement (SPA) with Indian Oil Corporation (IOCL) for the delivery to
India of up to 800,000 tons per year of LNG for ten years from 2026; and
-
an agreement (HoA) with Korea South-East Power for the delivery to
South Korea of up to around 500,000 tons per year of LNG for five years from 2027.
These agreements allow TotalEnergies to secure medium-term outlets for its global LNG supply portfolio. They also strengthen the Company's footprint in Asian markets, where it is particularly committed to supporting its customers with their decarbonization strategies.
“We are delighted to have been selected by IOCL and Korea South-East Power to supply LNG to
***
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
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).
View source version on businesswire.com: https://www.businesswire.com/news/home/20240603502795/en/
TotalEnergies
Media Relations: +33 (0)1 47 44 46 99l presse@totalenergies.com l @TotalEnergiesPR
Investor Relations: +33 (0)1 47 44 46 46 l ir@totalenergies.com
Source: TOTALENERGIES SE
FAQ
What are the new LNG contracts signed by TotalEnergies in Asia?
When will the new LNG contracts of TotalEnergies with IOCL begin?
How much LNG will TotalEnergies supply to Korea South-East Power?
How do the new LNG contracts impact TotalEnergies' market position?
What is TotalEnergies' goal regarding natural gas in its sales mix by 2030?
How do the new contracts align with TotalEnergies' environmental goals?
