TOTAL S.A. (NYSE:TOT) announced that the company and its partners ExxonMobil (NYSE:XOM) and Oil Search have signed a Gas Agreement with the Independent State of Papua New Guinea to develop the Papua LNG Project.
TOTAL operates the Elk and Antelope onshore fields in Papua New Guinea and is the largest shareholder of the PRL-15 permit with a 31.1% interest, alongside partners ExxonMobil (28.3%) and Oil Search (17.7%), post the State back-in right of 22.5%.
The finalization of the Gas Agreement will eventually lead to a final investment decision on the Papua LNG Project. This project of 5.4 million tons per annum (Mtpa) capacity will consist of two LNG trains of 2.7 Mtpa capacity each and will unlock more than 1 billion barrels of oil equivalent of natural gas resources.
TOTAL’s Long-Term LNG Plan
Per the LNG outlook of Royal Dutch Shell (LON:RDSa) PLC RDS.A, global demand for LNG will increase in the range of 4-5% within the 2015-2030 time period. Given massive long-term growth prospects of LNG, TOTAL has undertaken various initiatives to strengthen its position in the LNG market. Massive growth of LNG projects across the globe will help address the need for cleaner fuel.
Given growth prospects in LNG business, TOTAL has been actively expanding LNG business globally via acquisitions, collaborations and partnerships. Post the acquisition of Engie’s LNG assets, TOTAL is the second-largest player in LNG business on a global scale. Its position is further strengthened with the startup of Cameron LNG project.
The acquisition of a stake in Arctic LNG 2 will help the company cater to the rising demand for clean energy in the Asian markets. Additionally, the development of Papua New Guinea project and its proximity to Asian markets will enable TOTAL to cater to the rising demand in this region.
Recently, TOTAL and Tellurian Inc., a U.S.-based company, have inked several deals to develop the Driftwood liquefied natural gas (LNG) project in Louisiana. (Read more: TOTAL, Tellurian Ink Deal Related to Driftwood LNG Project)
TOTAL has also signed a MOU with Sempra Energy (NYSE:SRE) for the development of North America LNG Projects.
Zacks Rank and Price Movement
TOTAL currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Year to date, TOTAL’s shares have gained 8.8%, underperforming its industry’s growth of 14%.
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