Under the sale and purchase agreement (SPA), TotalEnergies will supply 600,000 metric tonnes of LNG from its global LNG portfolio.
TotalEnergies gas, renewables and power president Stéphane Michel said: “We are pleased to extend our long-standing cooperation with Hanwha, with whom we are already partnering on the Daesan petrochemical site, and in the United States for the development of 1.6GW of renewables.
“With this new contract, TotalEnergies increases its natural gas shipments to South Korea, the world’s third-largest importer of LNG in 2021. Our company is keen to support the country’s switch away from coal for power generation, with both LNG supplies and renewables projects, such as our significant ‘Bada’ 2 GW offshore wind project.”
Starting from 2024, LNG will be delivered to the Tongyeong regasification terminal in South Korea.
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The Tongyeong terminal has a regasification capacity of 806.3 billion cubic feet per annum.
Hanwha Energy will use this LNG to supply Hanwha & HDC’s greenfield 1GW power plant, which is being developed next to the Tongyeong terminal.
Hanwha Energy CEO Jung In Sub said: “It is significant that we have secured business stability by signing a long-term contract with our long-lasting partner TotalEnergies, even though the volatility of the LNG market has increased more than ever due to the recent unstable international situation.”
In April 2022, TotalEnergies booked impairments of $4.1bn in the first quarter of 2022. This was partly related to the Arctic LNG 2 project in the Russian Arctic and the Western sanctions on Moscow, following the invasion of Ukraine.
The firm also decided not to book proved reserves for the $21bn Arctic LNG 2 project due to uncertainty over its development.
By 2030, TotalEnergies aims to increase its natural gas share in its sales mix to 50%, reduce carbon emissions in the gas value chain, reduce methane emissions, and promote the transition from coal to natural gas.