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GlobalData: Arctic LNG 2 delays are denting TotalEnergies’ plans for a greener future

Published by , Editorial Assistant
LNG Industry,

Overcoming climate change is an essential part of TotalEnergies’ long-term growth strategy. The company has stated that its investment policy is designed and strategized to transform TotalEnergies into a multi-disciplined energy company, which will help it achieve its net zero target by 2050. A report by GlobalData titled Company Oil and Gas Development Outlook – TotalEnergies highlights TotalEnergies’ increased push in R&D of carbon capture, utilisation, and storage (CCUS) – such as the Northern Lights project in Norway, as well as plans to invest and develop major wind and solar photovoltaic (PV) projects over the coming years.

GlobalData: Arctic LNG 2 delays are denting TotalEnergies’ plans for a greener future

Tom Barrett, Data Analyst at GlobalData, commented: “Diversification of investment is crucial to Total’s long-term strategy. Starting within the period 2022 - 2025, 50% of the US$13 - 15 billion/y will be allocated to the development of new energies, primarily renewables. Total’s investment policy is attempting to transform the company as it moves towards the net zero target by 2050.”

A large aspect of the company’s diversification into a more well-rounded energy business also includes the upcoming and announced LNG projects. According to GlobalData’s report, Total’s presence across the entire LNG value chain: from production and liquefaction, trading, shipping, to regasification, has resulted in TotalEnergies being ranked as the second largest LNG player in the world.

TotalEnergies received Final Investment Decisions (FIDs) in 2019 on three major projects that are set to diversify the company’s portfolio: Arctic LNG2 in Russia, Mozambique LNG, and NLNG Train 7 in Nigeria. Combined, these have a production capacity of 40.3 million tpy – thus having the potential of helping the company’s target of selling 50 million tpy by 2025.

GlobalData’s report discusses how, due to the geopolitical situation in Russia, TotalEnergies has stopped recording proved reserves for Arctic LNG2 in its accounts and will not provide any more capital for this project, despite its potential to unlock over 7 billion boe from th Utrenneve gas and condensate field. Moreover, the company plans to gradually suspend its activities in Russia while guaranteeing the safety of its team. These principles of conduct were set as TotalEnergies’ condemnation of Russia’s military violence against Ukraine.

Barrett concluded: “The current geopolitical state creates an interesting problem for TotalEnergies that will no doubt have a significant impact on the company, as it was set to contribute up to 19.8 million tpy towards their natural gas production capacity.

“The Arctic 2 LNG project is just one example of Total’s investment in multiple major LNG projects around the world, and projects in Australia, Nigeria, and Mozambique mean that the company’s investments in this sector are diverse. Total is significantly expanding its regasification capacity through projects in India and France, as gas is expected to become the leading transition fossil fuel in the transition towards net zero, though renewable energy will eventually dominate.

“Total is already the number two play in LNG, and is involved in the world’s largest LNG project, the North Field East LNG project (NFE): LNG is an integral part of the company’s investment diversification, though investment in solar, wind, EV’s, and low-carbon hydrogen demonstrates Total’s commitment to net zero, as well as its increasingly diverse portfolio of investment.”

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