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TOTAL (TOT) to Supply LNG to ArcelorMittal Nippon Steel

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TOTAL SE announced that it has signed an agreement with ArcelorMittal Nippon Steel (“AMNS”) to supply the latter 500,000 tons of liquefied natural gas (LNG) annually until 2026. TOTAL will source the LNG from its global portfolio and deliver it in Dahej or Hazira LNG Terminal on the West Coast of India. This deal will strengthen the business tie-up between the two major global operators in the energy and steel industry.

AMNS will utilize the LNG to operate steel and power plants located in Gujrat, India. The LNG usage will significantly lower emissions from its plants. TOTAL is quite keen on lowering emissions and recently partnered with Siemens Energy to provide sustainable solutions for reduction of emissions related to LNG production.

TOTAL’s Presence in Global LNG Market

TOTAL is among the largest global LNG operators, and has been expanding LNG footprint through organic means, acquisitions, mergers, partnerships as well as collaborations. Increasing awareness about lowering emissions is boosting LNG demand across the globe. TOTAL, with its wide presence in the LNG market, is benefiting from the rising demand and trying to lower emissions from the production process. The company targets to produce 50 million metric tons per annum (mtpa) of LNG by 2025.

TOTAL’s LNG sales for 2020 were up 12% year over year, courtesy of the start-up of three trains at Cameron LNG in the United States, ramp up of Yamal LNG in Russia and Ichthys LNG in Australia as well as increase in trading activities.

It anticipates that the increase in oil prices during first-quarter 2021 will have a positive impact on average LNG price in the next six months. Given its presence in the entire LNG value chain, TOTAL will gain from the increase in LNG prices.

Focus on Clean Energy

Increasing emphasis on emission reduction and generation of more electricity from clean alternate sources of energy is becoming popular on a global scale. Usage of natural gas and renewable sources of energy are likely to increase on a global scale.

As the rollout of vaccines and gradually normalizing business activities are creating new opportunities in the renewable space, oil and gas companies like ExxonMobil (XOM - Free Report) and Chevron Corporation (CVX - Free Report) , among others, are also investing heavily in the renewable energy space.

Zacks Rank & Another Key Pick

TOTAL currently has a Zacks Rank #2 (Buy). Another top-ranked stock from the same industry is PetroChina Company Limited , currently sporting a Zacks Rank#1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetroChina’s long-term (three to five years) earnings growth is projected at 40.1%. The Zacks Consensus Estimate for 2021 EPS has moved up 193.5% to $5.40 per share in the past 60 days.

Price Performance

In the past 12 months, shares of TOTAL have outperformed the industry.

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