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
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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....