Total to supply LNG to ArcelorMittal Nippon Steel
Total and ArcelorMittal Nippon Steel (AMNS) have signed an agreement for the supply of up to 500 000 tpy of LNG until 2026.
The LNG will be sourced from Total’s global portfolio and offloaded either in Dahej or Hazira LNG Terminal, on the West Coast of India. AMNS will use the LNG to run its steel and power plants located in Hazira, Gujarat state, India.
“We are pleased to partner with AMNS and to supply the growing industrial LNG demand in India, a country that aims to more than double the share of natural gas in its energy mix by 2030 compared to today,”said Thomas Maurisse, Senior Vice President LNG at Total.“The supply of LNG will contribute to the reduction of AMNS’s carbon emissions, in line with Total’s ambition to offer its customers energy products that emit less CO2 and to support them in their own low-carbon strategies.”
This agreement strengthens Total’s relationship with AMNS and contributes to the decarbonisation of India’s steel industry, which still relies heavily on coal.
Total is the world's second largest privately owned LNG player, with a global portfolio of nearly 50 million tpy by 2025 and a global market share of around 10%. Thanks to its interests in liquefaction plants in Angola, Australia, Egypt, the United Arab Emirates, the US, Nigeria, Norway, Oman, Russia, and Qatar, the company markets LNG on all world markets. Total also benefits from strong and diversified positions throughout the LNG value chain, including gas production, LNG transportation, LNG trading, and some recent development in the LNG industry for maritime transport.
Qatar Cuts LNG Prices And Expands Into Asian Spot Market
Qatar is cutting prices for its gas and expanding into the Asian spot market as it seeks to maintain its number-one position in exports of liquefied natural gas.
According to unnamed sources cited by Bloomberg, the country has shifted its priority from prices to market share, hence the price undercutting and the push ahead with a production capacity expansion worth $29 billion. The goal is to increase LNG exports by 50 percent.
With this strategy, Qatar threatens the commercial viability of new LNG production capacity projects in the rest of the world, according to the report.
Australia has been breathing down Qatar’s neck for a couple of years now, at one point temporarily overtaking it as the world’s largest LNG exporter. The United States is also boosting its exports of the superchilled fuel. Last month exported almost as much as Qatar.
In truth, the reason for this was maintenance at a big production facility in Qatar, but the Gulf nation has reason to feel threatened by emerging competitors. Even so, it retains some major advantages over this competition.
“Nobody can compete with Qatari costs,”according to Jonathan Stern, a senior research fellow at the Oxford Institute of Energy Studies, as quoted by Bloomberg in its report.“They can do whatever they like and everybody will have to respond the way they can. And, especially when the market is in surplus and prices are low, that will impact the competition’s profits.”
Yet some LNG supply elsewhere remains competitive even at lower prices, such as Russian Novatek’s Yamal LNG and U.S. Cheniere Energy’s output. This is because of buyers’desire to not have to rely on a single source of LNG and diversify their sources of the fuel, and because of U.S. producers’flexible delivery terms and the fact that their prices are not tied to crude oil benchmarks.