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TotalEnergies revealed this in a statement on Thursday saying it is part of its strategy to grow its long-term LNG sales.
The company announced a 5-year extension of its SPA with CNOOC, for the delivery of 1.25 million tons of LNG per year to China until 2034.
TotalEnergies said that in China, natural gas serves as a crucial transition energy, mitigating the intermittency of renewable energy sources and reducing emissions when used as a substitute for coal in electricity generation.
Gregory Joffroy, senior VP, LNG at TotalEnergies, said this new agreement strengthens the company’s ties with CNOOC, a “key partner” for TotalEenrgies in the world’s largest LNG importing country.
“This agreement allows us to continue securing long-term sales in Asia and reduce our exposure to spot market gas prices,” he said.
CNOOC Gas & Power recently announced that the two firms signed an amendment to their existing SPA.
CNOOC’s unit said this is the third amendment to the SPA between the two firms, but it did not provide further details.
The initial long-term LNG SPA was signed in 2008, with an annual contract volume of 1 million tons per annum for a period of 15 years.
In 2018, TotalEnergies and state-owned CNOOC signed an amendment to the SPA to strengthen their cooperation in the LNG business.
The partners have increased the contract volume from 1 Mtpa to 1.5 Mtpa of LNG and extended the term to 20 years.
World’s third-largest LNG player
TotalEnergies says it 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 recently entered into deals to supply LNG to Indian Oil and Korea South-East Power.
The French firm also just entered into a heads of agreement with Türkiye’s state-owned natural gas and LNG firm Botas.
Under this 10-year contract, Botas will receive 16 LNG cargoes or up to 1.6 billion cubic meters per year from TotalEnergies.