Global energy company TotalEnergies is expanding in the US shale patch with an upstream acquisition in the Eagle Ford of South Texas, chairman and CEO Patrick Pouyanné said March 18.
“We are willing to integrate our LNG position with more upstream gas production,” Pouyanné said during remarks at CERAWeek by S&P Global in Houston.
“So we have made a deal with Lewis to acquire their non-operated position in Eagle Ford, which is operated by EOG. So we are, in fact, moving in different directions.”
Pouyanné had little else to say about the deal, and TotalEnergies declined to disclose further details beyond confirming that its deal involves assets owned by Lewis Energy Group.
TotalEnergies currently has upstream operations in the Barnett Shale.
Positioning for LNG
Operators in South Texas, home to one of Texas’ top gas-producing areas in Webb County and the prolific Dorado dry gas play, have great hopes for Eagle Ford gas to supply growing LNG export demand. At the same time, activity in Webb County has been slowing in recent months amid weak pricing.
TotalEnergies’ backing of the Rio Grande LNG terminal marked a major step forward for the project ahead of developer NextDecade reaching a final investment decision in July 2023 on the first phase of the export facility, which entails three liquefaction trains for a combined production capacity of about 17.6 million mt/year.
TotalEnergies took stakes in both NextDecade and Rio Grande as part of a broader deal that also included private equity company Global Infrastructure Partners becoming the majority investor in first phase of Rio Grande.
NextDecade will remain the operator.
TotalEnergies committed to a 20-year deal for 5.4 million mt/year with NextDecade supporting the first phase of Rio Grande out of a total 16.2 million mt/year that the US LNG developer announced selling under long-term sale and purchase agreements before reaching an FID. The developer expects to bring the Rio Grande project online in 2027.
TotalEnergies holds a 16.7% interest in the first phase of the Rio Grande. Under the initial agreement, TotalEnergies bought a 17.5% interest in NextDecade in three tranches for a total of $219 million.
The full project has a planned production capacity of up to 27 million mt/year, with a total of five trains proposed.
