French energy giant, TotalEnergies is ramping up investments in Liquefied Natural Gas (LNG) in a scenario that excludes Russia and is in a ‘very favourable’ position to benefit from the evolution of energy markets as a result of the energy transition.
Meanwhile, TotalEnergies Marine Fuels has marked a milestone in its Liquefied Natural Gas (LNG) bunkering supply network with a naming ceremony of the Brassavola LNG bunker vessel in Singapore.
The ceremony was held at Sembcorp Marine’s Tuas Boulevard Yard, marking a step closer to commencing TotalEnergies’ LNG bunkering services in Singapore.
According to the company, the ship will be the largest LNG bunker vessel for use in service in the Port of Singapore with 116.5 metres in length and 22 metres in width and a capacity of 12,000 cubic metres.
The Brassavola is scheduled to be operational in the first quarter of 2023.
The company in its 2022 Strategy & Outlook refocused the portfolio of oil and gas assets and projects on low cost (less than $20/b), a strong growth strategy in LNG to position itself among the top three worldwide, and the accelerated development into electricity, mainly renewable to reach the top five worldwide.
The presentation showed that with a breakeven anchored below $25/b, TotalEnergies is a much more profitable company today than it was ten years ago: at the same oil equivalent price, it generates an additional $15 billion of cash flow and can take full advantage of favourable environments.
In addition, the company expects underlying cash flow – excluding Russia – to grow by $4 billion over the coming five years using moderate energy price assumptions ($50/b for oil and $8/Mbtu for European gas), knowing that it would generate an additional cash flow of more than $3 billion for every $10/b increase in the price of oil. This structural cash flow growth will support dividend growth over the next five years.
In this context, the Board of Directors has adopted a cash flow allocation strategy for the coming years. It provides for the allocation of 35-40% of cash flow to shareholders through the cycles while accelerating the company’s transformation strategy with net investments increasing to $14-18 billion per year over 2022-25.
This increase will be dedicated in priority to the development of carbon-free energies and carbon footprint reduction programs which will represent about a third.
Investments in solar and wind will exceed $4 billion in 2022 (compared to $3 billion in 2021) and a $1 billion energy savings program will be deployed globally in 2023-24 to control the cost of energy consumed and accelerate the reduction of emissions.
World Maritime News report that the remaining two-thirds will be dedicated to growing in the LNG sector and to developing low-cost, low-emission oil projects to meet demand.