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 tons of liquefied natural gas (LNG) annually over a 15-year period, beginning in 2028. This initiative aligns with TotalEnergies’ global strategy to diversify and secure its revenues, as the French group faces hydrocarbon market volatility.
The sales agreement, also known as HoA (Heads of Agreement), marks a new step in TotalEnergies’ ambitions in China. In an official statement, the group emphasized 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 extended access to this market, TotalEnergies hopes to mitigate the effects of declining 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, cemented during the state visit of Chinese President Xi Jinping to France. This cooperation is based on the recognition of natural gas’s role in China’s energy transition, where demand for cleaner energy sources continues to grow.
Stéphane Michel, President of the Gas Renewables & Power division at TotalEnergies, stated that this agreement is an opportunity for the group to strengthen its position in China and contribute to the country’s energy transition. Michel affirmed that natural gas can mitigate the intermittency of renewable energy and serves as a solution to reduce greenhouse gas emissions when it replaces coal in electricity production.
LNG as a Strategic Lever for TotalEnergies
Beyond China, TotalEnergies is focusing on long-term contracts to secure supplies and stabilize revenues in a context of fluctuating markets. The company recently announced in New York that it is concentrating on LNG sales contracts to diversify its assets and reduce the impact of variable hydrocarbon prices. According to the group, around 4 million tons of LNG are expected to be covered by similar agreements by the end of the year.
Niu Shuanwen, Senior Vice-President of Sinopec Corporation, expressed his satisfaction with the strength of the cooperation between the two companies, affirming that this strategic partnership reinforced the roles of Sinopec and TotalEnergies as major players in the energy sector.
By capitalizing on its leading position and developing strong alliances in expanding markets, TotalEnergies is committed to addressing global energy challenges while actively participating in the energy transition. Through this agreement, the group also aims to contribute to sustainable development in China, which remains a major importer of natural gas.
