Total S.A. Notches Up Growth in Production, Refining Margins as Demand Strengthens

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Researched by Industrial Info Resources (Sugar Land, Texas)--Total S.A. (NYSE:TOT) (Paris, France) is seeing solid improvement on two fronts: a strong demand for petroleum products is boosting its refining margins, and project ramp-ups and higher commodity prices have accelerated production rates. Industrial Info is tracking more than $40 billion in active projects involving Total and its subsidiaries, including more than $16 billion worth that are nearing or under construction.

Earlier this month, Total elevated its role in the Oil & Gas Production Industry through its acquisition of ENGIE's (Paris, France) upstream liquefied natural gas (LNG) assets for $1.5 billion. The move is expected to put Total second only to Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands) in volumes of LNG produced per year. Among the assets acquired is an interest in Sempra Energy's (NYSE:SRE) (San Diego, California) Cameron LNG liquefaction plant in Hackberry, Louisiana; for more information, see Industrial Info's project report.

Total's slate of projects in the U.S. is led by its construction of an ethane cracker and related outside battery limits (OSBL) features at its refining and petrochemical complex in Port Arthur, Texas. Site preparation is underway for the cracker, which is expected to produce about 1 million metric tons per year of ethylene. Earlier this month, BASF Total Petrochemicals LLC, a joint venture between BASF Corporation (60%) and Total Petrochemicals & Refining USA (40%), installed processing and treatment facilities at the its petrochemicals facility within the complex, for the import of butylenes and butanes from the refinery, which is fully owned by Total. For more information, see Industrial Info's project reports on the ethane cracker and the OSBL features.

Total's hydrocarbon production also has grown significantly year-to-date, largely due to project ramp-ups across Asia and Africa. In Angola, subsidiary TotalFinaElf is at work on the conversion of a very large crude carrier (VLCC) to a floating, production and storage offshore (FPSO) facility. The $2 billion VLCC-FPSO vessel conversion in the Gulf of Guinea is expected to result in oil-treating capacity of 115,000 BBL/d, water-injection capacity of 200,000 BBL/d, gas-compression capacity of 100 million standard cubic feet per day and storage capacity of 1.7 million barrels of oil; it will be accompanied by a $350 million pipeline that will run 176 kilometers from the FPSO to an LNG plant in Soyo, Angola. For more information, see Industrial Info's project reports on the VLCC-FPSO and pipeline.

Total's Nigerian subsidiary has proven to be another bright spot. One of Total's highest-valued projects under construction is the $4.2 billion crude-oil FPSO facility in Nigeria's Gulf of Guinea. Following years of construction, the FPSO platform set sail from Geoje, South Korea, earlier this month for its integration and commissioning the Gulf of Guinea. Last month, TechnipFMC plc (London, England) installed six manifold modules at the field. For more information, see Industrial Info's project report.

Less successful were Total's gas, renewables and power segment earnings, which were down 49% in the third quarter when compared with the same period last year, largely due to crashing prices for solar energy. One of Total's largest solar projects, the El Pelicano Phase I solar photovoltaic plant in La Higuera, Chile, is expected to wrap up in the first quarter of 2018. The $112 million first phase and $100 million second phase each are expected to generate 53 MW from more than 211,000 panels. For more information, see Industrial Info's project reports on Phase I and Phase II.

Sales for Total's recently ended third quarter stood at $43 billion, a 15% increase from third-quarter 2016. Net income for the third quarter was reported to be $2.7 billion, a 39.4% increase.

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