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TotalEnergies: Pioneering LNG and Green Initiatives

General Report December 1, 2024
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TABLE OF CONTENTS

  1. Summary
  2. TotalEnergies' Commitment to Sustainability
  3. LNG Supply Contracts and Agreements
  4. Carbon Capture and Decarbonization Initiatives
  5. Energy Transition and Policy Recommendations
  6. Conclusion

1. Summary

  • TotalEnergies is at the forefront of strategic development in the liquefied natural gas (LNG) sector, focusing firmly on sustainability and carbon reduction. By reinforcing its energy portfolio with a significant share of natural gas, the company is working towards reducing carbon emissions. Its global presence in over 120 countries is bolstered by notable long-term LNG supply agreements with major Chinese entities, CNOOC and Sinopec, illustrating its stronghold in international energy markets. Alongside, TotalEnergies is pioneering carbon capture initiatives, particularly at the Cameron LNG facility, to advance decarbonization in LNG production. These efforts underline a broader vision to support the transition from coal to natural gas, aligning with energy transition goals worldwide.

2. TotalEnergies' Commitment to Sustainability

  • 2-1. Overview of TotalEnergies' sustainability strategy

  • TotalEnergies places sustainability at the heart of its strategy, projects, and operations. The company aims to increase the share of natural gas in its sales mix to close to 50% by the year 2030. This ambitious goal is part of its broader commitment to reduce carbon emissions and eliminate methane emissions that are associated with the gas value chain. Furthermore, TotalEnergies actively promotes the transition from coal to natural gas in collaboration with local partners.

  • 2-2. TotalEnergies' operational presence in over 120 countries

  • TotalEnergies operates in approximately 120 countries, representing a significant global footprint. The company is committed to sustainable development across all its operations, aiming to positively contribute to the well-being of communities worldwide. As part of its active engagement in international markets, TotalEnergies has established long-term LNG supply agreements, including supplying 1.25 million tons of LNG per year to CNOOC until 2034 and 2 million tons per year to Sinopec for 15 years. This operational presence underscores TotalEnergies' dedication to integrating sustainability within its business model.

3. LNG Supply Contracts and Agreements

  • 3-1. Long-term LNG supply agreement with CNOOC

  • TotalEnergies has entered into a long-term LNG supply agreement with CNOOC (China National Offshore Oil Corporation) to supply 1.25 million tons of LNG per year until 2034. This agreement is part of TotalEnergies' strategy to increase the share of natural gas in its sales mix to nearly 50% by 2030. The company aims to reduce carbon emissions and eliminate methane emissions associated with the gas value chain, and collaborates with local partners to facilitate the transition from coal to natural gas.

  • 3-2. LNG supply agreement with Sinopec

  • TotalEnergies has also secured a supply agreement with Sinopec (China Petroleum & Chemical Corporation) to provide 2 million tons of LNG per year for a duration of 15 years. This agreement aligns with TotalEnergies' commitment to sustainability and enhancing the reliability and affordability of energy. The company continues to integrate sustainability into its core operations and projects as part of its global strategy.

4. Carbon Capture and Decarbonization Initiatives

  • 4-1. Launch of carbon capture project at Cameron LNG

  • TotalEnergies has launched a carbon capture project at the Cameron LNG facility aimed at decarbonizing liquefied natural gas production. The initiative underscores the company’s commitment to sustainability and the well-being of communities in over 130 countries where it operates. This project is part of TotalEnergies' wider strategy to integrate sustainable development in its operations and reduce carbon emissions.

  • 4-2. Strategies for reducing carbon emissions in LNG production

  • TotalEnergies has implemented several strategies to reduce carbon emissions in its LNG production processes. These include substituting renewables and flexible gas for coal in electricity generation across all operating countries, as well as enhancing efforts to accelerate the reduction of methane emissions from fossil fuel production. The company's focus on sustainability is reflected in its operations, aiming to provide reliable, affordable, and sustainable energy.

5. Energy Transition and Policy Recommendations

  • 5-1. The role of natural gas in the energy transition

  • Natural gas plays a critical role in the energy transition by substituting renewables and flexible gas for coal in electricity generation across various countries. This transition is essential for reducing carbon emissions and promoting sustainable energy solutions.

  • 5-2. Policy recommendations for accelerating methane emissions reduction

  • To effectively accelerate the reduction of methane emissions from fossil fuel production, policymakers should focus on the following strategies: (a) Allocating subsidies and setting mandates based on cost and technology merit to minimize expenses for citizens and enhance societal engagement; (b) Eliminating bottlenecks in developing necessary supporting infrastructure, particularly electricity grids, and enhancing connections to this infrastructure; (c) Strengthening international cooperation to deploy the most affordable available technologies and develop financial instruments for use in developing countries.

Conclusion

  • TotalEnergies is solidifying its role as a leader in the LNG market by actively pursuing strategic and sustainable initiatives. Its long-term agreements with companies like CNOOC and Sinopec are critical steps towards securing a stable energy supply, emphasizing the company's commitment to meeting growing energy needs with lower environmental impacts. Projects like carbon capture at Cameron LNG highlight TotalEnergies' progressive strides in decarbonization. However, the ambitious goals of significantly reducing methane emissions and facilitating a full transition to a lower-carbon future present ongoing challenges. To overcome these hurdles, TotalEnergies must continue to work collaboratively with policymakers and industry stakeholders to drive technological advancements and infrastructural development. The practical applicability of these initiatives not only promises to reshape TotalEnergies' business operations but also sets a precedent in the global energy landscape, offering substantial contributions toward a cleaner and more sustainable future. Looking ahead, the involvement of TotalEnergies in such transformative projects fosters hope for innovation in energy transition techniques and bolstered policy support to expedite outcomes.

Glossary

  • TotalEnergies [Company]: TotalEnergies is a global integrated energy company that produces and markets a diverse range of energies, including oil, biofuels, natural gas, renewables, and electricity. With a presence in over 120 countries and a commitment to sustainability, TotalEnergies plays a significant role in the energy transition and aims to increase the share of natural gas in its sales mix to reduce carbon emissions.
  • CNOOC [Company]: CNOOC (China National Offshore Oil Corporation) is a major Chinese state-owned oil and gas company. Its partnership with TotalEnergies for LNG supply reflects the growing energy needs of China and the shift towards cleaner energy sources.
  • Sinopec [Company]: Sinopec (China Petroleum & Chemical Corporation) is one of the largest oil and gas companies in China. The agreement with TotalEnergies for LNG supply showcases Sinopec's efforts to diversify its energy portfolio and reduce reliance on coal.

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