Registration document 2007 - Total.com
Registration document 2007 - Total.com
Registration document 2007 - Total.com
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Gas & Power<br />
The Gas & Power division en<strong>com</strong>passes the marketing,<br />
trading, transport and storage of natural gas and liquefied<br />
natural gas (LNG), LNG re-gasification and the maritime<br />
transport and trading of liquefied petroleum gas (LPG). It<br />
also includes power generation from <strong>com</strong>bined cycle plants<br />
and renewable energies, the trading and marketing of<br />
electricity as well as the production and marketing of coal.<br />
TOTAL is continuing to develop its global presence in each<br />
of these activities.<br />
Natural Gas<br />
In 2006, TOTAL pursued its strategy of developing its activities<br />
downstream from natural gas production to optimize access for<br />
the Group’s present and future gas production and reserves to<br />
traditional (organized around long-term contracts between<br />
producers and integrated gas <strong>com</strong>panies) as well as newly (or<br />
soon to be) deregulated markets.<br />
The majority of TOTAL’s natural gas production is sold under<br />
long-term contracts. However, a part of its U.K., Norwegian and<br />
Argentine production as well as substantially all of its North<br />
American production are sold on a spot basis.<br />
The long-term contracts under which TOTAL sells its natural gas<br />
production usually provide for a price related to, among other<br />
factors, average crude oil and other petroleum product prices, as<br />
well as, in some cases, a cost of living index. Although the price<br />
of natural gas tends to fluctuate in line with crude oil prices, there<br />
tends to be a delay before changes in crude oil prices are<br />
reflected on long-term natural gas prices.<br />
The general trend towards the deregulation of natural gas<br />
markets worldwide tends to allow customers to more freely<br />
access suppliers, leading to new marketing structures that are<br />
more flexible than traditional long-term contracts.<br />
In this context, TOTAL is developing its trading, marketing and<br />
logistical activities to offer its natural gas production to new<br />
customers, primarily in the industrial and <strong>com</strong>mercial markets,<br />
who are looking for more flexible supply arrangements.<br />
(1) Source: International Gas Union 2006.<br />
Business overview<br />
Gas & Power - Upstream<br />
2<br />
Europe<br />
TOTAL has been active in the downstream sector of the gas<br />
value chain for more than 60 years. Natural gas transport,<br />
marketing and storage activities were initially developed to<br />
<strong>com</strong>plement the Group’s domestic production in Lacq (France).<br />
Today, TOTAL’s objective is to be<strong>com</strong>e a leading supplier of gas<br />
to European industrial and <strong>com</strong>mercial customers.<br />
Since April 2005, the Group’s transport and storage activities in<br />
southwest France have been brought under a wholly-owned<br />
subsidiary, TIGF, which operates a regulated transport network of<br />
4,905 km of pipelines and two storage units with a <strong>com</strong>bined<br />
usable capacity of 85 Bcf (2.4 Bm 3 ), approximately 20% of the<br />
overall natural gas storage capacity in France (1) .<br />
Highlights of 2006 included the inauguration of the Euskadour<br />
pipeline (TIGF, 100% of the portion in France). This pipeline,<br />
whose construction was approved in 2003, is the second<br />
pipeline to connect the Atlantic coasts of Spain and France.<br />
In 2006, TOTAL sold 243 Bcf (6.9 Bm 3 ) of natural gas to French<br />
customers through its marketing subsidiary <strong>Total</strong> Énergie Gaz<br />
(TEGAZ), <strong>com</strong>pared to 260 Bcf (7.4 Bm 3 ) in 2005 and 268 Bcf<br />
(7.6 Bm 3 ) in 2004.<br />
In Spain, since 2001, TOTAL has marketed gas in the industrial<br />
and <strong>com</strong>mercial sectors through its participation in CEPSA Gas<br />
Comercializadora. This <strong>com</strong>pany is held by TOTAL (35%), CEPSA<br />
(35%) and the Algerian national <strong>com</strong>pany Sonatrach (30%).<br />
Taking into account TOTAL’s 48.83% interest in CEPSA, TOTAL<br />
has a direct and indirect interest of approximately 52% in this<br />
<strong>com</strong>pany. In 2006, CEPSA Gas Comercializadora sold<br />
approximately 119 Bcf (3.4 Bm 3 ) of natural gas, <strong>com</strong>pared<br />
to approximately 63 Bcf (1.8 Bm 3 ) in 2005 and 35 Bcf (1 Bm 3 )<br />
in 2004. CEPSA is participating in studies for the Medgaz gas<br />
pipeline project, planned to directly connect Algeria and Spain,<br />
through its 20% interest, which gives TOTAL an indirect interest<br />
of 10% in the project. The Group relinquished its direct<br />
participation in the project in 2006.<br />
In the UK, TOTAL’s subsidiary <strong>Total</strong> Gas & Power Ltd sells gas<br />
and power to the industrial and <strong>com</strong>mercial markets. This<br />
subsidiary also conducts global gas, electricity and LNG trading<br />
activities. In 2006, <strong>Total</strong> Gas & Power Ltd marketed 135 Bcf<br />
(3.8 Bm 3 ) of natural gas to industrial and <strong>com</strong>mercial customers,<br />
<strong>com</strong>pared to 189 Bcf (5.4 Bm 3 ) in 2005 and in 2004. Electricity<br />
sales in 2006 amounted to 3.2 TWh in 2006, <strong>com</strong>pared to<br />
1.7 TWh in 2005 and 1.3 TWh in 2004. In addition, TOTAL holds<br />
a 10% interest in Interconnector UK Ltd, a gas pipeline<br />
connecting Bacton in the United Kingdom to Zeebrugge in<br />
Belgium.<br />
TOTAL – <strong>Registration</strong> Document 2006 37