Oil majors jockey for position to ride an LNG boom

Firms are reshuffling their portfolios in favour of gas ahead of the looming energy inflection point

You have 1 free article remaining

Subscribe now for unlimited access or become a Bronze Member for free For queries see our FAQ or contact us

SubscribeBronze Sign-upMember Login

Although gas may not dominate energy supply for another 10-20 years or more, the industry is looking over the horizon. Following on from a series of liquefied-natural-gas-driven M&As that included ExxonMobil's acquisition of a 25% stake in Mozambique Area 4 and Shell's purchase of Chevron's position in Trinidad, Total and others have maintained the momentum.

The latest round of deals reflects a continuing scramble for the whole working package-access to low-cost fields, transport, sales and purchase contracts, and regasification. In short, an investment that gets off to a quick and profitable start. Exxon, for instance, described its Mozambique acquisition as coming "at a cost of supply that is among the lowest for new LNG projects".

Total's $1.5bn acquisition of Engie's portfolio of upstream LNG assets, which closed in July, says a lot about where things are heading. Total bought from Engie not only participating interests in liquefaction plants-most importantly the interest in the Cameron project that gives the French giant a foothold in the US, but also regasification capacity in Europe and, to boot, an LNG tanker fleet.

Thus, Total has catapulted itself into the big league. Overnight the company becom....

read more from petroleum-economist.com