TotalEnergies signs 15-year LNG deal with Jiangsu Guoxin GroupAnalysis

TotalEnergies has locked in a long-term buyer in China's second-largest gas-consuming province. The company signed a heads of agreement (HoA) with Jiangsu Guoxin Group to deliver 900,000 tons of LNG per year for 15 years, starting in 2028. The deal still depends on the finalization of the sales and purchase agreements (SPAs).

Deal terms

The volumes go to Jiangsu Guoxin Group's new LNG terminal in Rudong. The gas is meant for city gas supply and flexible power generation, helping to secure energy supply and meet peak demand across the province. Jiangsu Guoxin Group is described as a major energy company in Jiangsu Province.

Jiangsu is China's second-largest province by both GDP and natural gas consumption volume. For TotalEnergies, the agreement adds to its long-term LNG sales portfolio in China, which the company calls one of the world's largest importing and fastest growing LNG countries.

What each side said

Gregory Joffroy, Senior Vice President, LNG at TotalEnergies, tied the deal to the company's integrated LNG model and its ability to build lasting partnerships with leading local Chinese counterparties. He pointed to the company's record of delivering LNG to customers despite major disruptions this year, which he said shows the "resilience of our integrated global LNG portfolio". He added that the agreement shows the role natural gas can play in the energy transition by supporting industrial development and giving power generation more flexibility in high-growth provinces such as Jiangsu.

Zhang Wenxiang, Deputy General Manager of Jiangsu Guoxin Group, said the agreement will strengthen the group's gas supply security and improve the operational efficiency of its infrastructure. He said it will also help the group carry out the new energy security strategy and meet its responsibility as a provincial state-owned energy enterprise. He added that it will support Jiangsu in reaching its carbon peaking and carbon neutrality goals.

Our read

An HoA is a first step, and the SPAs have to follow before the 2028 start is firm. The terms on the table are clear: 900,000 tons a year, 15 years, one named receiving terminal, and a buyer that plans to use the gas for both city supply and flexible power. That pairing of base-load city demand with peaking power is what the source describes as the purpose of the volumes.

We reported earlier that ADNOC Gas signed a five-year LNG supply deal with TotalEnergies for up to 1.6 million tonnes.