Engie says it "will remain committed" to its downstream business following the sale of its upstream and midstream LNG activities, liquefaction, shipping and international LNG trading businesses to
Total, which was confirmed on Wednesday.
The aggregate value of the deal is
$2.04 billion, whilst additional payments of up to
$550 million could also be payable by Total if there is an improvement in the oil markets over the coming years.
The agreement signed with Total includes participating interests in liquefaction plants - notably the interest in the Cameron LNG project in the US - long-term LNG sales and purchase agreements, a fleet of 10 LNG tanks as well as access to regasification capacities in Europe.
Engie will keep its downstream activities, which covers
regasification infrastructure and
LNG retail end-customer sales.
The transaction is expected to translate into a
$1.4 billion reduction in Engie's consolidated net financial debt, excluding earn-out.
"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," Engie explained in a statement.
"Engie 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 French firm said.
In parallel with the agreement, Engie announced that it will be "accelerating its development in downstream gas activities" with the creation of a new entity responsible for the development of renewable hydrogen, which the company believes "is set to become increasingly important for the energy revolution".
Engie has also reached an accord with Total for an initial 10-year period that will see both firms cooperate on the promotion of the use of biogas and renewable hydrogen and Engie become Total's preferred supplier for all new projects related to renewable hydrogen and biogas supply.
Engie is part-owner of LNG bunker supplier
Gas4Sea together with partners Mitsubishi Corporation and NYK Line. The company's delivery asset, the Engie Zeebrugge, is the world's first purpose-built LNG bunkering vessel. Following its arrival in Antwerp earlier this year, the ship now performs regular ship-to-ship bunker deliveries.
In May, Engie also agreed to enter into a
joint venture with AES Corporation to market and sell LNG to third parties in Central America and to provide bunkering services.
Engie is also part-owner of
Gaztransport & Technigaz (GTT) - an engineering company specialised in the design of membrane containment systems for the transportation and storage of liquefied gases.
