TotalEnergies SE said Friday that its LNG sales decreased in the first quarter mainly due to lower demand in Europe and an unplanned outage at the Freeport export terminal on the upper Texas coast.
The company has 2.2 million tons (Mt) of annual tolling capacity at Freeport’s Train 3, which was offline most of the first quarter to repair damage caused by freezing temperatures in January. The other two trains are currently undergoing similar work and Freeport has reported ongoing problems with Train 3.
TotalEnergies said its liquefied natural gas sales were 10.7 Mt in the first quarter, down 3% from the year-ago period and down 9% from 4Q2023. The company is the largest trader of U.S. LNG and is the second largest LNG seller in the world.
A mild winter in Europe also helped preserve storage inventories, while industrial demand there has yet to return to levels seen before Russia invaded Ukraine and cut off gas exports to the continent.
Average LNG prices during the period also fell to $9.58/MMBtu, down 28% from the year-ago period as falling demand helped cool them.
The company’s average Brent crude price crept up by 3% from the year-ago period to $83.20/bbl. Brent is currently trading around $90 amid heightened geopolitical tensions in the Middle East and ongoing production cuts among OPEC and its allies.
Management also stressed that recovering Asian LNG demand and limited liquefaction capacity additions this year are helping to keep forward global gas prices above $11.
Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, the company expects LNG prices to average between $9 and $10 in the second quarter. Oil-indexed LNG contracts are typically sold based on an average crude price over the previous three to six months.
The company’s oil and gas production was stable during the first quarter at nearly 2.5 million boe/d, flat with the year-ago period.
Volumes were lifted by hydrocarbon production for LNG, which was up 6% year/year to 492,000 boe/d. The increase was mainly due to higher capacity availability at the Ichthys terminal in Australia, Nigeria LNG and at QatarEnergy facilities.
Overall, TotalEnergies expects oil and gas production to remain near 2.4 million boe/d in the second quarter.
The company reported first quarter net income of $5.8 billion ($2.40/share), up from $5.6 billion ($2.21) in the year-ago period.
