TotalEnergies: Q1 LNG earnings impacted by lower European demand

France-based TotalEnergies, one of the world’s largest LNG players, said on Tuesday that the quarterly results of its integrated LNG business will be impacted by the lower demand in Europe.

“Besides the effect of the deconsolidation of Novatek as of January 1, 2023, the results of the integrated LNG segment, while remaining very significant, will be impacted by the lower demand for LNG in Europe due to the mild winter weather and high inventory levels,” TotalEnergies said.

The company’s integrated LNG business logged a jump in its adjusted net operating income to $11.2 billion in 2022 due to a high demand in Europe.

TotalEnergies also took a $4.1 billion hit in its fourth-quarter results for the write-down of its stake in Russian LNG producer Novatek.

Average LNG price down

TotalEnergies said the average LNG price reached $13.27/MMBtu in the January-March period, logging a drop when compared to the same period in 2022 and also compared to the previous three-month period.

The price dropped about $1.56/MMBtu compared with the previous quarter, while it decreased 0.33/MMBtu compared to the first quarter in 2022.

In 2022, the average LNG price was at $15.90/MMBtu, a rise of 81 percent year on year.

LNG volumes for the first quarter are not available yet.

TotalEnergies expects its hydrocarbon production to exceed 2.5 Mboe/d this quarter, up by close to 50 kboe/d compared to the previous quarter, benefiting in particular from the start-up of gas production on Block 10 in Oman and the acquisition of an interest in the SARB / Umm Lulu oil fields in the United Arab Emirates.

“Refining & chemicals results are expected to be higher given the sustained refining margins during the quarter,” it said.

The Paris-based firm noted it will publish the results of the integrated LNG and integrated power segments separately on April 27, 2023.

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