TotalEnergies in $750MM+ LNG Deal


TotalEnergies (NYSE: TTE) has revealed that it has entered into a multimillion dollar infrastructure agreement, related to the Gladstone LNG project, with GIP Australia.

In a statement posted on its website, the company outlined that it has completed a transaction with GIP, in relation to the downstream facilities of Gladstone LNG, which is owned by Total GLNG Australia (TGA), for a consideration of more than $750 million. As part of the deal, GIP will receive a throughput-based tolling fee calculated on TGA’s share of gas processed through the downstream facilities over a period of 15 years, TotalEnergies highlighted.

Under the agreement, TGA will retain full control and ownership of its 27.5 percent interest in the Gladstone LNG downstream joint venture. The deal has an effective date of January 1, 2021.

“We have worked closely with GIP to achieve this infrastructure transaction and are happy of this first collaboration with such an experienced infrastructure partner,” Jean-Pierre Sbraire, the chief financial officer (CFO) of TotalEnergies, said in a company statement.

“This monetization of infrastructure assets contributes to focusing further TotalEnergies’ capital on core producing assets and fully reflects TotalEnergies’ active portfolio management,” the TotalEnergies CFO added.

The Gladstone LNG project comprises the production of natural gas from the Fairview, Arcadia, Roma, and Scotia fields, which are located in the Bowen-Surat Basin in Queensland, Australia, and its transportation over approximately 250 miles to a gas liquefaction plant in the industrial port of Gladstone, northeast of Brisbane, on the eastern coast of Australia, TotalEnergies highlights on its website.

The Gladstone LNG liquefaction plant consists of two trains with a total capacity in excess of 7.8 million tons per year, according to TotalEnergies, which noted that the downstream facilities mainly comprise the gas transportation system and the two-train gas liquefaction plant. The Gladstone LNG project has been exporting LNG since 2015.

Back in September 2010, TotalEnergies, then named Total, announced the signature of an agreement with Santos and Petronas to acquire a 20 percent interest in the Gladstone LNG project in Australia for $750 million. In December that year, the company revealed that it had acquired an additional 7.5 percent interest in the project project from Santos for an amount of $281.25 million.

TotalEnergies is involved in two major Australian LNG projects; Gladstone LNG and Ichthys LNG in Darwin, which has been operational since 2018. The company has been present in the country for over 60 years.