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TOTAL Acquires Toshiba's LNG Assets, Expands US LNG Business

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Royal Dutch Shell (RDS.A) agreed to sell gas assets in Alberta for C$190 million, while Marathon Oil (MRO) closed the divestment of its North Sea assets.

TOTAL S.A. TOT announced that it has signed an agreement to take over Toshiba’s portfolio of liquefied natural gas (“LNG”) in the United States. It includes a 20-year tolling agreement for 2.2 million tons per annum (Mtpa) of LNG from the Freeport LNG train 3 in Texas and the corresponding gas transportation agreements on the pipelines feeding the terminal. Under the agreement, TOTAL will acquire all the shares of Toshiba America LNG Corporation for a consideration of $15 million.

The addition of 2.2 Mtpa of LNG to TOTAL’s existing LNG capacity in the United States will place the company among the leading exporter of LNG in the United States. In the recent past, TOTAL signed a MOU with Sempra Energy SRE for the development of North America LNG projects. The company is expected to export nearly 7 Mtpa of LNG by the end of 2020 from the United States.

TOTAL’s Long-Term LNG Plan

Per the LNG outlook of Royal Dutch Shell PLC RDS.A, global demand for the commodity will increase in the range of 4-5% within the 2015-2030 time period. Given strong long-term growth prospects of LNG, TOTAL has undertaken various initiatives to strengthen its position in the LNG market. Acquisitions, tie-ups and the commencement of organic LNG projects are helping TOTAL to strengthen its position in the global LNG market.

TOTAL has a strong presence across the globe and the LNG business continues to expand. During first-quarter 2019, the company signed a definitive agreement with Novatek for the acquisition of a direct 10% interest in Arctic LNG 2, a liquefied natural gas development led by Novatek on the Gydan Peninsula, Russia.  

In April 2019, TOTAL and its partners ExxonMobil XOM and Oil Search have signed a gas agreement with the Independent State of Papua New Guinea to develop the Papua LNG Project.

Acquisitions and startups will continue to boost TOTAL’s LNG portfolio, which is expected to touch 40 Mtpa by 2020 and result in 10% market share in worldwide LNG business.

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