ENGIE Selling Part of LNG Activities to Total

Image Courtesy: ENGIE

French utility company ENGIE has received a firm and binding offer from compatriot oil and gas firm Total for the sale of its upstream and midstream LNG activities.

Under the deal, the company would sell its liquefaction, shipping and international LNG trading, for an aggregate value of USD 2.04 billion, including an earn-out of up to USD 550 million, payable under certain conditions.

ENGIE said that it will keep its downstream activities, including the regasification infrastructures and LNG retail end-customer sales, and further accelerate its development in this area. The company is therefore pursuing its refocus on three key businesses: low carbon power generation, infrastructures – notably gas, and integrated downstream customer solutions.

Furthermore, as green gases, biogas and renewable hydrogen, are believed to be key to the energy transition, ENGIE is establishing a new entity dedicated to the development of renewable hydrogen. The company has signed an agreement to become Total’s preferred biogas and renewable hydrogen supplier.

The intended transaction is in line with ENGIE’s strategy to reduce its exposure to commodity prices. It also completes the Group’s action plan to move away from upstream oil and gas activities following the announcement of the sale of ENGIE Exploration & Production International in May of this year.

The company will remain committed to its downstream activities which are core to its strategy, notably its retail sales, its GTT subsidiary and the group’s regasification terminals in France, the United States and Chile.

The envisaged transaction will be presented to the relevant employee representative bodies of ENGIE and is subject to customary closing conditions. The intended transaction could be completed in the course of 2018, according to the company.

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