GTT, French clean LNG producer, has ‘a lot of work to do’, Company News

“At the moment we have a lot of work”confirms Philippe Berterottier, CEO of GTT, that net player A French LNG company whose shares set new stock exchange records today (+54% YtD). The current context that puts pressure on the economy, on the contrary, is the business of the GTT. Due to the war in Ukraine, the liquefied natural gas market has never been more explosive as Europe begins to wean itself off Russian gas. In two months, Germany has already reduced its dependence by 20% (in mid-April, supplies were 35% from Russia, compared to 55% before the war), by increasing purchases of natural gas from Norway and the Netherlands. , as well as significantly increasing LNG imports.

100% of the LNG tanker market

For LNG imports in the absence of gas pipelines, given the geography and distances between the main production areas (Australia, Qatar, USA, Malaysia, Algeria) and consumption areas (China, South Korea, Japan, Europe), gas transportation by LNG tankers is inevitable. The gas must be liquefied by extreme refrigeration (-160°) for transport by sea; This is where GTT comes to the rescue. Île-de-France equips gas carriers built at shipyards in South Korea and China with cryogenic membranes to maintain very low temperatures.

Today, GTT holds 100% of the market for gas carriers and floating terminals (gas carriers moored to the shore and connected to the distribution network). “This is not a monopoly situation, because there are competitors, but our competitors do not have contracts., Philippe Berterottier explains. The competing system is the MOSS system, designed in Norway and built in Japan. “But today not a single gas carrier is built with this system. » GTT technology allows more liquid to be carried on a boat of the same size, since LNG is transported in bulk in a hull, while a competing system, “uses spherical tanks, four or five in succession on the deck, which leads to a loss of space, especially in the extreme part of the sphere. […] Thus, transported volumes are lower despite the fact that LNG carriers are more expensive. (several tanks with thick walls), Our technology uses fewer materials and offers at least equivalent security. »

Orders until 2026

95% of GTT’s turnover is in Asia, which is not surprising since the Île-de-France-based Saint-Remy-le-Chevreuse company is partnering with South Korea’s Hyundai Samho Heavy Industries, the world’s largest shipbuilder. World. How does this union work? “Usually the shipowner specifies our technology, and the shipyard, which has a license agreement with us, implements it. » GTT also works with DSME and other Korean and Chinese shipyards. His clients build in part for European ship owners who work for charterers around the world; Europeans make up approximately 60% of orders.

In addition to equipping gas carrier hulls with cryogenic membranes for LNG transportation, GTT is also involved in projects of floating regasification platforms (approximately 10% of turnover), “we intervene in reservoirs and in all activities process LNG regasification is located on the deck of the ship, we provide detailed plans to the shipyard”, and also, but very rarely, on liquefaction projects, an operation that is usually performed on land trains. But not always. Thus, for Russia’s giant project, Artik LNG 2, GTT is expected to build tanks that are submerged and rest on the seabed. “The first tank has been built. Liquefaction lines must be installed on the roof. »indicates Philippe Berterottier, who is asked about the status of the project and possible inconsistencies, given the war in Ukraine and sanctions against Russia.

Recently, financial analysts at private bank Oddo BHF estimated that if delayed or cancelled, the potential risk would have a worst-case impact on turnover of €50m this year at an expected annual value of €320m, a historically high level, just below a peak of nearly €400m. million achieved in 2020. Orders, very numerous in the first months of 2022, there is only a stream of ads, will only generate income from 2024 to 2026. Last week, GTT announced it had received a new order from Hyundai Samho Heavy Industries to design LNG tanks for a new LNG tanker on behalf of a European shipowner, with delivery scheduled for the fourth quarter of 2025.

Fast solution for floating terminals

Currently, the company’s management is conducting commercial negotiations with several countries: South Korea and China on the side of the shipyard and “When it comes to shipowners, there are essentially two countries in the world: Greece and Norway, two big countries in this area. But you can also find Japanese and possibly Canadians. » And since then “The Russian crisis makes floating terminals very interesting, a number of orders can be realized in the coming months”, anticipates Philippe Berterottier. To be able to use more LNG, Europe must also equip itself with regasification terminals. Compared to a land-based solution that needs to be built, floating terminals have the advantage that they can be installed very quickly. When Germany announces today that it will have four floating terminals, it is because it approached shipowners who had them in stock and offered to lease them for several years. Similarly in France, when recently the daily Echo it was reported that government authorities have asked TotalEnergies to install a new floating terminal at the port of Le Havre, one that already exists, inherited from the French oil company’s takeover of Engie’s LNG activities, “and in these events there were two floating terminals”says GTT CEO.

France, along with Spain, is one of the European countries most equipped with regasification terminals. In addition to floating facilities, it has land terminals (two at Fos-sur-Mer, one at Montoir-de-Bretagne, near Saint-Nazaire and one at Dunkirk). Until recently, Germany did not have them, neither land nor floating. Estonia and Latvia do not have them, neither Finland, whose locks have just been blocked by Russia, nor Denmark or Hungary, the Czech Republic or Slovakia, which, in addition, having no access to the sea, may not rent floating terminals.

LNG, relatively clean fuel

In another booming market, LNG for container ships, GTT is negotiating with French CMA CGM and with international ship owners. “whether Israelis, Canadians or Asians. LNG is a key solution in the context of the energy transition. Our technology is suitable for the tanks of very large container ships.” Why is LNG considered the least polluting fossil fuel? “When burning, it does not emit sulfur oxide or nitrogen oxide, unlike oil, does not emit fine particles, unlike oil or coal, and emits 25% less CO2 than these two fuels. In short, it emits only CO2, but in a smaller amount than oil or coal. »