The chairman and chief executive of the French multinational that is one of the world’s most powerful energy companies said putting two billion dollars into a joint venture with Qatar Energy was the company’s response to doubts expressed after it ended investment in Russia.
The deal for a 6.25-percent stake in the North Field East project was announced Sunday barely two months after TotalEnergies said it would pump no more money into Russia where it has huge natural gas interests.
Pouyanne, who has headed TotalEnergies since 2018, told AFP the deal was part of a “success story” with Qatar, where it struck a first accord in 1986.
“It comes at the right time. Some were asking the question what would TotalEnergies do in place of Russia? This is the answer,” he said in an interview.
“We have announced projects in the United States. We wanted another one. We have added Qatar to the portfolio.”
The company is determined to remain a leader in liquefied natural gas (LNG), he stressed.
Pouyanne said his company would help build a new LNG train, or production factory, for North Field East but the speed of recovering the $2-billion investment would depend on market prices.
Consumers beware
Higher energy prices have gripped Europe with some governments wondering how they will get through the next winter without Russian supplies which are being cut because of the Ukraine war.
Qatar, one of the world’s top three natural gas producers with the United States and Australia, has warned it cannot send more in the short term.
Pouyanne said that consumers “who want electricity all the time”, must use less.
“What consumers can do is turn down the heating a bit in Europe. At the moment there is no heating because it is summer. But my advice is not too much air conditioning either,” he said.
Pouyanne also said more investment in production is needed to “bring prices down”.
The new natural gas complex in Qatar will only be ready at the end of 2025 or early 2026, he said. “We need more to stabilize the market. That’s important.”
TotalEnergies, like Qatar Energy, also wants more medium- and long-term contracts in Europe.
European governments have in recent years refused long-term deals so they can take advantage of market falls.
Russia’s invasion of Ukraine has forced them to change their policy and many have made approaches to Qatar in recent months.
Qatar is attractive, Pouyanne added, because it sells to China, Japan, South Korea and India in Asia, but can also provide Europe.
“Competitive production costs, liquefication costs that benefit from economies of scale and a good position, that is why Qatar has become a leader for liquefied natural gas.”