French power major Engie may sell its LNG business, says firm’s union

Gas and oil multinational has future of LNG operations under consideration after it set target of offloading Dh61 billion worth of assets in next two years.
The Engie Tower, the home of the French electricity and gas company in Paris. The company is set to book a full-year loss. Thomas Oliva / AFP
The Engie Tower, the home of the French electricity and gas company in Paris. The company is set to book a full-year loss. Thomas Oliva / AFP

The French gas and power group Engie is considering the future of its liquefied natural gas (LNG) business, which could lead to a reorganisation and maybe a sale, the firm’s CGT union said on Monday.

Earlier this year, Engie set a target to sell €15 billion (Dh61.57bn) worth of assets in 2016-18, potentially including oil and gas exploration and production businesses which have been hit by low energy prices.

“Management is thinking about the future of LNG,” said Yves Ledoux, the CGT central coordinator at Engie.

He said while he was not aware of management plans, the union expected a reorganisation and possibly a sale.

An Engie spokeswoman declined comment.

The firm’s Global Energy Management and LNG division, hit by lower oil and gas prices and lower volumes of gas sales, saw turnover fall 47 per cent in the first half and made a loss before interest, tax, depreciation and amortisation of €39.

The French newsletter L’Expansion reported on Monday Engie was set to book a full-year loss at this business.

It also reported that Engie planned to cut about 1,150 jobs in various functions. It said Engie intended to cut 20 per cent of its support functions in France, including 600 jobs at its call centres, 250 sales positions, 200 IT positions and possibly about 100 jobs in its trading division.

An Engie spokeswoman declined to comment.

The LNG industry in Europe is suffering due to low gas prices and overcapacity in LNG terminals.

In June, the CGT said almost 10,000 jobs were at risk at Engie over the next three years due to the utility’s cost-cutting plans, which Engie has denied.

At the end of last year, Engie employed 155,000 staff globally, including 74,000 in France.

The company said at the start of the year it wanted to cut costs by €1bn by 2018.

business@thenational.ae

Follow The National’s Business section on Twitter

Published: September 19, 2016 04:00 AM

SHARE

Most Read