TotalEnergies to Supply Sinopec with 2 MMtpa of LNG for 15 Years

Wedoany.com Report-Nov 7, TotalEnergies SE has signed an agreement with China Petroleum & Chemical Corp. to supply the state-owned refiner with two million tons per annum (MMtpa) of liquefied natural gas (LNG) for 15 years starting 2028.

“Thanks to this major agreement with one of the leading LNG players in the country, TotalEnergies strengthens its long-term position in the LNG market in China, the largest market in the world”, TotalEnergies said in a statement.

“In China, natural gas is a key component of the energy transition as it mitigates the intermittency of rapidly growing renewable energies and helps reduce greenhouse gas emissions when it replaces coal in electricity production”, the French energy major added.

TotalEnergies aims to increase the share of natural gas in its sales mix to nearly 50 percent by 2030.

“This new agreement demonstrates the competitiveness of TotalEnergies’ LNG business and allows us to continue growing our long-term sales in Asia”, Stéphane Michel, president for gas, renewables and power at TotalEnergies, said in the online company statement.

Sinopec senior vice president Niu Shuanwen commented, “Natural gas is an important enabler for realizing energy transition and dual carbon goals.”.

“Sinopec is committed to building the world's leading clean energy and chemical company and will continue to promote energy transition and the clean, diversified and secure supply of energy”, Niu added.

The agreement is part of the “strategic cooperation agreement” the companies forged in May during Chinese President Xi Jinping’s state visit to France, TotalEnergies said in the statement.

The cooperation pact aims to grow the companies’ existing partnerships by collaborating on biofuels, green hydrogen, carbon capture and other decarbonization activities, according to a TotalEnergies press release May 7.

Last September TotalEnergies announced long-term agreements to export LNG to China, South Korea and Turkiye.

On September 24 it said it had signed a heads of agreement with HD Hyundai Chemical Co. Ltd. for the sale of 200,000 metric tons per year. The agreement lasts seven years from 2027.

On September 19 TotalEnergies said it had secured a five-year extension to a contract with China National Offshore Oil Corp. for the delivery of 1.25 MMtpa of LNG until 2034.

On September 18 TotalEnergies said it had inked a heads of agreement with Turkiye’s state-owned BOTAS for the delivery of 1.1 MMtpa of LNG for 10 years from 2027.

TotalEnergies said the long-term sales to Asia reduce its exposure to spot market prices.