Total Buys Toshiba's US LNG Business

France’s Total has signed an agreement with Japan’s Toshiba Corporation to take over its portfolio of US LNG business, the French firm said June 1.

The deal includes a 20-year tolling agreement for 2.2mn mt/year of LNG from Freeport LNG train 3 in Texas and the corresponding gas transportation agreements on the pipelines feeding the terminal. Train 3 of the Freeport LNG plant is expected to start commercial operations by Q2 2020.

Under the transaction, Total will acquire all the shares of Toshiba America LNG (TAL) for a consideration of $15mn to be paid by Total to Toshiba and will be assigned all contracts related to their LNG business by Toshiba Energy Systems and Solutions for a consideration of $815mn to be paid by Toshiba to Total, the French company said. Total will therefore receive from Toshiba a net cash consideration of $800mn payable at the closing date. The proposed transaction is subject to required approvals and is expected to close by the end of 2019.

“The takeover of Toshiba’s LNG portfolio is in line with Total’s strategy to become a major LNG portfolio player. Adding 2.2mn mt/yr of LNG to our existing positions in the US, in particular Cameron LNG, will enable optimisations of the supply and operations of these LNG sources,” commented Philippe Sauquet, president Gas, Renewables and Power at Total. “Already an integrated player in the US gas market, Total is set to become one of the leading US LNG exporters by 2020 with a 7mn mt/yr portfolio.”

Toshiba in a separate statement said that with the close of the transfer, TAL will be deconsolidated from Toshiba Group, and it expects to record a loss, including related expenses, of some yen 93bn ($860mn) in its consolidated business financials.

The Japanese firm had last year agreed to sell the US LNG business to China’s ENN Group. However, the deal was scrapped by ENN in April this year.