TotalEnergies, one of the world’s leading energy players, has announced a significant partnership with Sinopec, the Chinese energy giant. This agreement provides for the supply of 2 million tonnes of liquefied natural gas (LNG) per year for a period of 15 years from 2028. This initiative is part of a global strategy to diversify and secure the revenues of the French group, which is faced with the volatility of the hydrocarbon markets.
The sales agreement, also called HoA (Heads of Agreement), marks a new stage in TotalEnergies’ ambitions in China. The group, in an official press release, underlined the importance of this long-term commitment, which aims to strengthen its presence in the Chinese LNG market, currently the largest in the world. By ensuring prolonged access to this market, TotalEnergies hopes to mitigate the effects of the drop in hydrocarbon prices.
TotalEnergies and Sinopec: strategic partners
TotalEnergies has already established a strong relationship with Sinopec. Earlier this year, the two companies signed a strategic cooperation agreement, sealed during Chinese President Xi Jinping’s state visit to France. This cooperation is based on the recognition of the place of natural gas in China’s energy transition, a country where demand for cleaner energy sources continues to grow.
Stéphane Michel, president of the Renewable Gas & Power division at TotalEnergies, said that this agreement is an opportunity for the group to strengthen its positions in China and contribute to the country’s energy transition. Michel affirmed that natural gas makes it possible to compensate for the intermittency of renewable energies and constitutes a solution to reduce greenhouse gas emissions when it replaces coal in the production of electricity.
LNG as a strategic lever for TotalEnergies
Beyond China, TotalEnergies relies on long-term contracts to secure its supplies and stabilize its revenues in a context of fluctuating markets. The company, in fact, recently announced in New York that it was focusing on LNG sales contracts to diversify its assets and reduce the impact of variable hydrocarbon prices. According to the group, around 4 million tonnes of LNG should be covered by similar agreements by the end of the year.
Niu Shuanwen, Senior Vice President of Sinopec Corporation, expressed satisfaction with the strong cooperation between the two companies, saying that this strategic partnership strengthens the role of Sinopec and TotalEnergies as major players in the energy sector.
By capitalizing on its leadership position and developing strong alliances in rapidly expanding markets, TotalEnergies is committed to responding to global energy challenges while actively participating in the energy transition. With this agreement, the group also hopes to contribute to sustainable development in China, which remains a major importer of natural gas.
