TotalEnergies CEO says US LNG drive may cause global oversupply, flags new Rio Grande decision
By America Hernandez and Emily Chow
PARIS/MILAN, Sept 9 (Reuters) - The U.S. is building too many liquefied natural gas plants, TotalEnergies TTEF.PA CEO Patrick Pouyanne said on Tuesday, warning it could lead to a long-lasting glut in the market if all planned projects come online.
Pouyanne earlier said that a final investment decision on additional units at the Rio Grande LNG project in Texas, in which Total has a stake, could be announced later on Tuesday.
The French oil major is the world's largest buyer of U.S. LNG, with gas surpassing oil in the company's sales mix for the first time last year, as a transition to cleaner fuels boosts global gas demand in a trend expected to last decades.
The United States is the world's top LNG exporter, with total annual capacity expected to reach 115 million tons this year and more projects on the way, according to the U.S. Energy Information Administration.
"We are building too much," Pouyanne said during a panel on LNG at the GasTech conference in Milan. "We are facing many U.S. projects. We will face oversupply ... for some years if all these projects come onstream."
However, Pouyanne earlier told CNBC in an interview that the U.S. presented "plenty of energy" investment opportunities for Total.
"We continue to explore gas and LNG, and we will announce a new train for Rio Grande LNG; the FID (final investment decision) will be announced today," he said.
Pouyanne will meet with the U.S. energy and interior secretaries later on Tuesday.
NextDecade NEXT.O, which is developing Rio Grande, said via email that it was "on track to announce FID on Train 4 at Rio Grande LNG by our target date of September 15," confirming a timeline announced last month.
TotalEnergies has a 17.5% stake in the Houston-based LNG producer and a 16.7% interest in Phase 1 of the Rio Grande project, which includes the first three trains.
In April, it signed a 20-year deal to purchase 1.5 million tons per year from Train 4, although Reuters reported last month that Total had declined its option to invest in Train 5.
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