[NGW Magazine] Interview: Marc Benayoun, EDF
EDF executive vice president for gas and Italy, Marc Benayoun, spoke to Natural Gas World Magazine about its new Mozambique contract, LNG’s significance to the group, and Turkstream.
EDF is the world’s largest generator, with 136 gigawatts of capacity, 55% being nuclear mainly in France. In terms of power produced in 2017, nuclear was 77%, with gas and renewables each about 10% although both are growing. Italian utility subsidiary Edison, of which Benayoun is CEO, is also an upstream producer.
But EDF group buys Russian and North African pipeline gas too, and increasingly LNG. EDF on February 20 announced it will buy 1.2mn metric tons/year from the Anadarko-led Mozambique LNG, primarily for delivery to France. This is the first East African LNG supply contracted primarily for the European market. First shipments may begin in 2023. In previously published remarks (see NGW Vol 3/5, p22) Benayoun spoke of the context in which that contract was priced. Here he's asked about Mozambique LNG itself.
Do you think Mozambique LNG's supply cost can match that of US projects?
I cannot comment on that. We have a contract and a price structure that we have analysed and which is competitive and attractive for us. The cost structure of the project – the economics of the upstream, the project’s size, and the technology used - is a different issue and one to ask those involved upstream. We are a buyer and we believe it is a very good contract that makes sense for us. We have also noted that the marketing campaign of the project is well advanced. But on issues of the cost structure, you will have to ask Anadarko.
Why are Edison and EDF still separately contracting term LNG supplies? (Edison signed a 1mn mt/yr SPA with US developer Venture Global LNG in September2017)
More than half of EDF Group’s gas is sold in Italy where Edison’s sales are about 15bn m³/yr. That’s out of total EDF sales of almost 30bn m³/yr, which also includes gas sold in France, Belgium, the UK and US. So, it’s a fairly large portfolio, half of which is used in Italy where Edison has storage and regasification assets.
Since 2017, we have a single team looking at all long-term commitments of EDF and Edison when it comes to gas. So yes, a contract may be allocated to one country or another based on where the gas is more likely to be burned. But there is a single team now working on long-term gas, and that team is based here in Italy at Edison.
What are EDF's main LNG contracts?
We have contracts in the US and a large contract with Qatar which is very important for our business in Italy. LNG is becoming more and more important for us for the years to come. If we want to be successful in the gas industry, it’s difficult without LNG. We want LNG to represent a bigger part of the picture. I will not comment on specific deals and how they are priced.
Is EDF looking to invest in new developing markets for LNG, and if so where?
EDF’s international division is active in various parts of the globe, including countries with very significant demand for power. We have projects particularly in the southern cone of South America. There may be additional projects in the future. In that context, having LNG in our portfolio is very helpful. So yes, LNG globally, and regas with combined-cycle plants [CCGTs] are areas of growth for EDF. However, fighting climate change is very important for us, therefore we invest primarily in carbon-free generation, and in gas projects where this makes sense – such as high heat rate, balancing of renewables.
Turning to pipeline gas, Edison (along with Greece's Depa) is co-operating with Gazprom over a gas transport pipeline route across southern Europe. Will Turkstream go up through the Balkans or instead west to link into the TAP pipeline, or what share is envisaged going where?
The commitment [on what route] has not been made right now, so it’s impossible for me to comment. But this project is advanced and cost-competitive in terms of the shipping cost of the gas. We are working hard, we think it is a good project, and we will see where the market is going before taking any FID.
Has EDF gas-fired power projects in the Balkans, or is it looking to transit gas to EU markets?
At the moment, the idea is to get additional gas through a different route to bring gas into the south of Italy. This is a gas supply and infrastructure project, there’s not a lot of CCGT involvement right now. But there will be a need for additional CCGT capacity in Italy, as Italy moves away from coal.