TotalEnergies Faces Q3 Profit Dip Amid Oil Price Slump but Banks on China LNG Growth

TotalEnergies, the French energy giant, recently announced that its third-quarter downstream performance would see a significant decline. This is attributed to dropping global oil prices and reduced refining margins in Europe and other regions. The company anticipates its European refining margin to be at $15.4 per ton for the third quarter, considerably lower than the $44.9 per ton recorded in the previous quarter. The detailed quarterly performance results are scheduled for release on October 31.

Meanwhile, TotalEnergies has extended a strategic sales agreement with China's CNOOC, committing to deliver 1.25 million tons of liquefied natural gas (LNG) annually until 2034. This partnership underscores TotalEnergies' strategy to strengthen its footprint in China's expanding LNG market, which serves as a pivotal growth avenue in the company's global portfolio.

The renewed agreement is part of TotalEnergies' overarching plan to maintain its robust LNG presence. China, as the world's largest LNG importer, presents a vital market. Gregory Joffroy, TotalEnergies' Senior Vice President of LNG, emphasized the importance of this agreement in sustaining long-term sales in Asia and mitigating risks from fluctuating spot market prices.

TotalEnergies continues to play a significant role in global LNG supply chains, with a business model encompassing exploration, gas liquefaction, transportation, and regasification. In 2023, the company sold 44 million tons of LNG, aiming for a 50% increase by 2030. These efforts are part of a broader drive to transition to cleaner energy sources and align with global carbon reduction goals.

Recently, TotalEnergies has also stepped up its natural gas exploration investments in regions like South Africa, Namibia, and Suriname. Notable agreements have been signed with India's IOC and Korea's KOSPO, further diversifying and extending its LNG supply network.

In its green transition, TotalEnergies is committing significant investment toward low-carbon energy developments. In 2023, the company allocated over $5 billion to low-carbon projects. By 2030, TotalEnergies aims to double its renewable energy capacity and substantially reduce methane emissions, aligning with its ambition to become a leader in clean energy.

TotalEnergies' ongoing innovations, including the development of a zero-emission floating production system in Angola, mark its proactive role in transitioning to sustainable energy while maintaining operational efficiency. The company's ability to balance growth and sustainability reflects its strategic foresight and commitment to environmental stewardship.