MEETING WITH LAURENT VIVIER, SENIOR VICE PRESIDENT, GAS
GAS & LNG DEPLOYING AN ASSERTIVE STRATEGY
BEING A GLOBAL AND INTEGRATED GAS AND LNG PLAYER
The LNG business is a long term business and each time you talk about a long term business, the main difficulty is to go through the ups and downs of the market without forgetting that you need to take the long term view.
[Laurent Vivier, Senior Vice President, Gas]
That’s exactly what we’ve been preparing as Total: we are not only a producer, but as well a marketer and a trader of LNG. And it allows us just to respond to signals by different buyers and reroute our cargos where they are most needed.
The situation of Total is special on two counts. Firstly we are one of the few global players and we are positioned, and historically quite strong for example in the Middle East, but we are now having two projects in Australia, which has been the latest producing hub to develop in the LNG market, we will have some production coming from the US, we will have some production coming from the Arctic circle in Russia. So we are positioned everywhere on this LNG market so that’s the first thing: we are a global player. The second one is that we are perfectly happy to be present along the whole value chain, which is not the case for other companies which are sometimes happy just to be focused on the upstream, or sometimes on the downstream.
[Growing integrated gas business with access to all LNG markets]
We now want to diversify ourselves and go, and increase our presence in the downstream of this chain. It is being an integrated company. That is our model, being integrated. It allows us to go through the ups and downs of the energy market where the margin is sometimes displaced along this chain. And it allows us as well to have some consolidated outlets for our own production.
[Flexible supply and demand in line with market needs]
It’s our responsibility but as well it does make business sense to be all long this chain that we can control the flows of LNG and of gas from the producing well up to the end user.
[Capturing full value chain margin]
PROVIDING AFFORDABLE GAS AND LNG
The overall chain, value chain of gas and LNG, is an expensive one, there is plenty of investment so we need absolutely to reduce the costs of this chain so that we can ensure the competitiveness of the natural gas delivered to the end user.
[Reducing liquefaction costs to 500 $/t
Floating regasification units reducing costs to 50 $/t]
The problem of gas and mostly LNG is that logistics is very important and is adding a lot of costs to the commodity itself, to the molecule of gas... that’s where we need to do some technological innovation. And this can happened both in the upstream part and in the downstream part.
[Starting from low cost gas]
It is on the liquefaction part for example where you need to use and to take advantage of more modular, cheaper, smaller liquefaction trains which allow the decrease of the cost.
[Simplifying plant designs]
And as well on the receiving end, on the regasification terminals: floating storage and regasification units allow a lot of countries suddenly to have access and to position themselves on the LNG map where before it was extremely expensive (the terminals were costing roughly 1 billion to cost and now you can do this for 25% of the cost). And that’s where innovation and where the improvement technology needs to be focused.
[Operating FSRUs (Floating Storage and Regasification Units)]
So that a lot of countries, and emerging countries in particular, can have access to this clean fuel which is natural gas.
Developing new markets for gas: a competitive and clean energy