TotalEnergies: Qatar’s Future LNG Cargoes Could Be Diverted Away From Europe

TotalEnergies and Qatar could divert to other countries LNG cargoes bound for France after 2026 for 27 years, according to the chief executive of the French supermajor.

Earlier this month, QatarEnergy and TotalEnergies signed two long-term LNG agreements under which Qatar will supply up to 3.5 million tons per year of LNG to France for 27 years beginning in 2026.

Under the deal, the LNG will be delivered on an ex-ship basis to the Fos Cavaou LNG receiving terminal in southern France.

TotalEnergies is a minority partner in Qatar’s huge LNG expansion projects North Field East (NFE) and North Field South (NFS), from which the volumes to be delivered to France will be sourced. TotalEnergies’ partnership in the expansion projects is made up of a 6.25% share in the NFE project and a 9.375% interest in the NFS project.

“If we need to redirect part of these LNG (flows) to another country... I think Qatar and ourselves, if it's in our interest, we will do it,” TotalEnergies CEO Patrick Pouyanne said on the conference call for the Q3 results, as carried by Reuters.

“I don't see (how) you could manage complex power electricity markets in Europe with a lot of renewables without having flexible assets,” the executive added.

TotalEnergies is not the only European major to have recently signed LNG supply deals with Qatar’s state giant QatarEnergy.

Earlier this week, QatarEnergy signed another 27-year agreement to ship LNG to Europe by agreeing to deliver cargoes for Eni in Italy beginning in 2026, after similar deals with Shell and TotalEnergies for supply to the Netherlands and France, respectively. 

Under the latest deal with Eni, QatarEnergy and the Italian major will deliver LNG to FSRU Italia, a floating storage and regasification unit located in the port of Piombino, in Italy’s Tuscany region.

Earlier this month, Qatar signed an agreement with Shell to deliver LNG to the Gate LNG terminal in the port of Rotterdam.

By Charles Kennedy for Oilprice.com

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