This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

China Will Be Profit-Gusher for French Oil Company Total

LNG plays a dominant role in China's energy space as nearly half the country's natural gas imports consist of LNG.

Moreover, the country's LNG demand has been growing at a rapid pace. In 2012, China's LNG imports climbed 20% from 2011 to 706 billion cubic feet as it became the third largest importer of LNG. According to most recent estimates, in the first 11 months of 2013, China already had imported 6% more LNG than 2012.

Total has been a big player in China's LNG sector. Since 2010, the company has supplied nearly 5 million tons of LNG to China, serving more than 8% of the country's market. Under their new contract, Total and CNOOC will review the prices and will establish a framework to supply an additional 1 million tons of LNG per year.

Total, which currently fulfills China's demands from Middle East and Africa, is going to use the additional supplies from its projects in Australia, Russia and the U.S to pump more LNG into the country.

Furthermore, Total also has agreed to enter into a joint venture with InterOil (IOC) by purchasing InterOil's 40.1% stake in the Elk-Antelope gas field in Papua New Guinea. The two companies will develop this attractive prospect to serve the energy-hungry Asian economies, particularly China.

Total is also playing a big role in helping China to meet its ambitious shale gas targets.

According to the U.S. Energy Information Administration, China has the world's largest technically recoverable shale gas reserves, of 1,115 trillion cubic feet. Most of these lie in the Sichuan and Tarim Basins.

In 2012, China produced just 1.8 billion cubic feet of shale gas from test wells. Government officials, however, have set an ambitious plan to produce 230 billion cubic feet of unconventional fuel by the end of 2015 and 2,100 billion cubic feet by the end of the decade.

Total and Sinopec (SNP), are hunting for shale gas in China's Anhui province in the 4,000 square-kilometer Xuancheng permit close to Nanjing. Drilling could begin as early as this year, following evaluation of the reserves.

Sinopec and CNPC, China's largest oil company and the parent of PetroChina (PTR), hold nearly 80% of the country's shale gas reserves. Together they are targeting shale gas production of 95 billion cubic feet by 2015. 

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CEO $100.41 0.00%
TOT $42.99 0.00%
AAPL $93.99 0.00%
FB $102.01 0.00%
GOOG $682.40 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs