'This agreement allows us to continue securing long-term sales in Asia and reduce our exposure to spot market gas prices'. Image by EyeEm Mobile GmbH via iStock
TotalEnergies SE has signed a heads of agreement (HoA) with South Korea's HD Hyundai Chemical.
The agreement, with prices indexed both to Brent and Henry Hub, is for the delivery of 200,000 tons of liquefied natural gas (LNG) per year for seven years starting in 2027, the French oil major said in a news release.
The agreement strengthens TotalEnergies' long-term position in South Korea, the world's third-largest LNG-importing country, the company said.
In Asia, LNG serves as a true transition energy, mitigating the intermittency of renewable energy sources and reducing emissions when it replaces coal in electricity generation, the company noted.
"We are pleased with this agreement with HD Hyundai Chemical, which will supply natural gas to one of their industrial sites. This agreement allows us to continue securing long-term sales in Asia and reduce our exposure to spot market gas prices," Gregory Joffroy, Senior Vice President for LNG at TotalEnergies, said.
TotalEnergies said it is the world's third largest LNG player with a global portfolio. The company benefits from an integrated position across the LNG value chain, including production, transportation, access to regasification capacity in Europe, trading, and LNG bunkering. Its ambition is to increase the share of natural gas in its sales mix to close to 50% by 2030, to reduce carbon emissions and eliminate methane emissions associated with the gas value chain, and to work with local partners to promote the transition from coal to natural gas, according to the release.
SAF Agreement with Air France-KLM
Meanwhile, TotalEnergies signed an agreement with Air France-KLM to supply up to 1.5 million tons of sustainable aviation fuel (SAF) to Air France-KLM Group airlines over a 10-year period, until 2035.
The agreement marks one of the largest SAF purchase contracts signed by Air France-KLM to date, according to a separate news release. In 2022 and 2023, Air France-KLM was the world's leading SAF user, representing 17 percent and 16 percent of total global production respectively. The contract builds on a memorandum of understanding (MoU) signed in 2022 for the supply of 800,000 tons of SAF.
The SAF supplied by TotalEnergies to Air France-KLM will be made from waste and residues from the circular economy and will be produced in TotalEnergies' French and European biorefineries and refineries by coprocessing. The SAF will be used to fuel flights operated by Air France-KLM's airlines on departure from France, the Netherlands, and other European countries.
SAF allows for a reduction in carbon dioxide emissions of at least 75 percent and up to 90 percent over the entire fuel life cycle, compared with fossil fuel equivalents, according to the release.
"SAF contributes both to the energy transition of our customers in the aviation sector and to the industrial transition of our refineries. It therefore represents a real 'win-win' for the future of industry and aviation", Patrick Pouyanné, Chairman and CEO of TotalEnergies, said. "For the past 10 years, we have been pioneers in the field, investing in biorefineries and SAF production facilities in France as well as developing coprocessing technologies in our refineries. Building on these industrial successes, we intend to continue this momentum in Europe and worldwide".
"Securing the volumes of more sustainable aviation fuel needed to decarbonize our activity is a major challenge. This agreement with TotalEnergies is a further step in this direction, and a testament to our long-standing support for the development of SAF production in France and Europe. A solid SAF sector capable of meeting our industry's needs is a key factor in Europe's sovereignty and energy independence," Benjamin Smith, CEO of Air France-KLM Group, said.