France's TotalEnergies Q2 equity LNG sales price hits two-year high

France's TotalEnergies said July 15 its average realized sales price for equity LNG in the second quarter of 2021 was at $6.59/MMBtu, its highest realized price since Q1 2019.

The Q2 average sales price was up by 8% quarter on quarter and by 50% year on year.

The Q2 average was, however, below that of the JKM front-month LNG price in the period, as assessed by S&P Global Platts, of $10.04/MMBtu.

The JKM benchmark price reached an all-time high of $32.50/MMBtu in mid-January, driven by a combination of incremental weather-related gas demand in Northeast Asia, limited storage capacity and regional liquefaction outages.

It remained at relatively high levels through the second quarter, and on July 14 was assessed at $13.34/MMBtu.

A large amount of long-term LNG supply globally remains contracted on an oil-indexed basis, however, meaning the spot price increase would only have a limited impact on the portfolio of big players such as TotalEnergies.

TotalEnergies has said previously that the LNG price indicator reflected the combined effect of sales volumes and prices of long-term contracts and spot sales.

It is the sixth consecutive quarter TotalEnergies has published an average sales price for its LNG, with the major saying it introduced the price to allow for a "better understanding" of the company's integrated gas business unit performance.

In 2020, TotalEnergies' equity LNG sales amounted to 17.6 million mt, up 8% from the previous year. Overall, LNG sales were up 12% on the year in 2020 at 38.3 million mt.

TotalEnergies also published July 15 its average global gas sales price of $4.43/MMBtu for Q2 2021, which was up from $4.06/MMBtu in Q1 2021.

'Core' LNG ambition

In September last year, TotalEnergies outlined its new corporate strategy with a focus on LNG and renewable energy growth. LNG growth, CEO Patrick Pouyanne said, would be at the "core of our ambition."

Total LNG sales will reach 50 million mt/year by 2025, up from around 35 million mt/year now, Pouyanne said.

TotalEnergies has interests in three major new LNG projects coming online in 2023-25: the Novatek-operated Arctic LNG 2; Mozambique LNG; and Nigeria LNG's seventh train.

Mozambique LNG had been due online in 2024, but the project is currently under force majeure and delayed by at least a year due to the militant insurgency in the southeast African country.