Patrick Pouyanné, Board Chairman and CEO of Total
SHANGHAI, Apr. 1 (Xinhua) -- Total, the second largest LNG player in the world, will further develop the entire gas value chain from production, sales & purchase, shipping, trading, regasification to end customer in response to growing demand, said Patrick Pouyanné, board chairman and CEO of the company, in an exclusive interview with Xinhua before the opening of the 19th International Conference & Exhibition on Liquefied Natural Gas (LNG2019).
LNG2019 will open in Shanghai on April 2 and last to April 5. Patrick Pouyanné is a speaker at the plenary forum “New LNG Markets” to be held on April 2.
The International Energy Agency earlier predicted that global natural gas consumption will grow by 42.8 percent from 2017 to 2040, accounting for 25 percent of primary energy mix. During 2017-2023, 37 percent of incremental gas consumption is expected to come from China.
“Most of this rising demand for natural gas will come from fast-growing economies whose energy systems still rely heavily on coal, such as China, India and other Asian countries,” noted Pouyanné. In these markets, despite a lack of infrastructure in most cases, natural gas remains an essential tool for addressing energy and climate concerns, and can be used to generate heat and electricity, as well as fuel for transportation.
To respond to such as a market trend, natural gas is placed at the heart of Total’s strategy. “We want to be integrated along the gas value chain to take full advantage of this growing energy source and discover new LNG outlets, whether through FSRU-to-power, bunkering or road transportation for trucks,” said Pouyanné.
Gas production and marketing has been growing steadily over the years at Total. In 2018, natural gas accounted for 50 percent of the company’s overall production compared to approximately 35 percent in 2005. “We expect this figure to reach 60 percent within the next 20 years,” Pouyanné told Xinhua.
In the upstream, Total has recently carried out major developments and transactions such as the start-up of several major projects like Yamal LNG in Russia and Ichthys LNG in Australia, the acquisition of Engie’s upstream LNG business and the agreement with Sempra Energy (Cameron LNG & Energía Costa Azul LNG), as well as new LNG projects in key supply regions (Arctic LNG 2, Nigeria LNG extension or Papua LNG).
In the downstream, Total continues to invest in the development of new gas markets and applications. For example, the company promotes the deployment of floating storage and regasification units (FSRUs) to unlock the access to LNG for fast-growing economies.
Another example is its acquisition of a 25 percent stake in Clean Energy, the leading distributor of natural gas fuel for heavy-duty trucks in the United States. In addition, Total signed an agreement with CMA CGM, the first shipping company to equip its transcontinental container ships with LNG-powered engines. All this reflects Total’s determination to boost the development of new natural gas as a transportation fuel, thereby contributing to cleaner mobility.
Besides great market opportunities, Pouyanné also pointed out main challenges for natural gas -- its cost of delivery to customers and methane emissions.
According to Pouyanné, gas is still more expensive to produce than coal or oil and thus the industry needs to work on lowering the cost of natural gas for markets. In particular, the logistics of transporting LNG is not fully developed and is expensive compared to the liquid oil market established by traders many years ago. “However, the LNG market is rapidly becoming commoditized and portfolio companies, such as Total, have a key role to play in this context.”
“With regard to methane, gas will not fulfill its true potential unless we mitigate the issue of fugitive methane emissions related to its production and transportation,” said Pouyanné
In September 2018, the Oil and Gas Climate Initiative (OGCI) set a goal of reducing the average intensity of upstream methane emissions among its members from 0.32 percent in 2017 to less than 0.25 percent in 2025, with an ultimate target of 0.20 percent.
Total’s intention is to sustainably decrease emissions intensity to below 0.20 percent. “Our aim is to work towards near zero methane emissions from the full gas value chain in support of achieving the goals of the Paris Agreement,” said Pouyanné.
This triennial event was first held in 1968. This year marks the first time the conference to be held in China, the world’s fastest growing LNG market. LNG 2019 is presented by the International Gas Union (IGU), Gas Technology Institute (GTI) and the International Institute of Refrigeration (IIR).
The Shanghai conference, the largest LNG event ever held in China, is hosted by China LNG Association, China Gas Society, Chinese Association of Refrigeration and China Gas Association. An estimate of over 170 enterprises and 1,800 representatives from 53 countries and regions will attend the conference. (Contributed by Liu Xiaoyun and Jiang Yujuan, edited by Tong Wei, tongwei@xinhua.org)
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