TotalEnergies signs carbon capture, renewables and upstream deals with Petronas

TotalEnergies signs carbon capture, renewables and upstream deals with PetronasTotalEnergies has signed deals with Petronas to develop carbon capture in depleted fields in Malaysia and build a solar farm in Australia to decarbonize an LNG plant and plans to announce joint investment in hydrocarbon assets in Angola, Patrick Pouyanné, Chairman & CEO of TotalEnergies, said on the sideline of the Energy Asia 2023 conference in Malaysia.

The solar investment in Australia would be with Gentari, the renewable energy arm of Petronas, said Pouyanné.

He said TotalEnergies and Petronas have already made large investments in Brazil because the country allows for development of large "giant deposit fields" with a low cost and were building on that upstream partnership.

"Gas is essential to energy, LNG in particular," he said, adding that TotalEnergies was the third largest LNG company in the world and managed around 12% of the world market in 2022 that amounted to around 48 million mt.

Asia is key to the growth of the LNG market, although last year most of the growth was in Europe because of market events. He highlighted that fundamentally the growth is in China, Korea, Japan, Vietnam and all the Asian countries.

Pouyanné said with the energy transition, the growing market will also be electricity.

"We need electricity. We don't need only renewables. Renewables is part of the way to produce electricity, but the right combination for the future is gas and renewables," he said.

Contrary to the general belief, electricity is a profitable business, he said. "You can make a lot of money with electricity when you have the right skills and we select the right assets," Pouyanné said.

LNG demand

Pouyanné expects the competition for LNG in the global market to continue and highlighted that the European governments benefited from good weather the previous winter.

"I hope the weather will be good next winter," he said, adding that that the situation was very stressed in Europe because of Russian gas.

"We are eliminating Russian gas almost to zero. We need to have a lot of LNG. Last year, we took around 50 million mt of LNG from Asia to Europe," Pouyanné said.

"The European governments should think what they have done. In order to bring all this energy, the only way was to pay more in the world market," he said.

"So, we pushed all the prices up and then we took LNG from Bangladesh, from Vietnam, from Thailand and we pushed these countries to use more coal." "And then we say, look, you are using more coal because of Europe who have taken the gas," he added.

Platts assessed JKM for August at $12.543/MMBtu on June 22, according to S&P Global Commodity Insights data.