SINGAPORE (Reuters) - French energy group Engie remains committed to using natural gas for power generation despite selling its oil and gas exploration and production (E&P) unit and LNG assets during the past two years.
The company, which generates half of its electricity globally from natural gas and the rest from renewables, sees a strong global movement to tap biogas for power generation, Engie’s Executive Vice President Didier Holleaux told the Reuters Commodities Summit.
“Having a strong position in upstream and midstream LNG is no longer necessary for us,” Holleaux said.
“We also see a strong move into more and more renewable gas world-wide: Gas produced through the methanization of agricultural waste and from waste treatment.”
Engie sold its oil and gas E&P unit to UK upstream independent Neptune Energy Group last year and also completed a sale of its liquefied natural gas (LNG) business to Total in July.
The company continues to be involved in gas distribution in the Asia Pacific and is working on various LNG infrastructure projects as it believes that replacing coal with gas is the easiest and quickest way to reduce greenhouse gas emissions in the region, Holleaux said.
These include a project in Indonesia with Perusahaan Gas Negara and Perusahaan Listrik Negara, the state-owned gas and power companies, to supply LNG to 10 different power plants, said Holleaux, who was attending the Singapore International Energy Week.
Engie is also rebuilding its LNG trading business globally with a team headed by Gordon Waters in Singapore.
“The fact that we have sold our mid-stream business doesn’t mean that we have no need for short-term LNG trading because from time to time we need cargoes,” Holleaux said.
“LNG globally will be growing, short-term trading will be growing because there are needs for adjustment (to supplies) for this market. We’ll just be a small part of this business.”
For renewables, Engie is seeking to expand its market share in selling electricity directly to corporations instead of grids and it is working with partners such as French retailer Casino and Unisun in China.
Engie will exit the coal-fired power business in Asia once it completes the sale of its Thai subsidiary Glow Energy, part of the company’s two-year plan to sell off coal, upstream oil and gas businesses and to invest in areas such as renewable energy, power grids and energy services.
The $4 billion deal to sell Glow to Global Power Synergy Company Pcl (GPSC), a unit of PTT Pcl’s, was blocked by Thailand’s energy regulator earlier in October.
“It’s for the buyer GPSC to decide if they will appeal to the Thai government. We will act accordingly,” Holleaux said, adding that Engie would have to look for other buyers if GPSC decides not to appeal.
“We still have a few coal assets outside of Asia Pacific which we want to divest,” he said.
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Reporting by Florence Tan; Editing by Christian Schmollinger