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ENGIE to Hang on to LNG - Selling Coal & Oil

Source: Reuters 9/21/2016, Location: Europe

French gas and power group ENGIE is not considering selling its liquefied natural gas (LNG) activities but confirmed it will exit burning coal and producing oil, Chief Executive Isabelle Kocher told Reuters.

On Monday, the firm's CGT union said ENGIE was considering the future of its LNG business, which could lead to a reorganisation and maybe a sale.

'No, gas really is part of our activities ... Shipping gas to countries which today are relying on coal and which want to switch to gas, that is at the heart of our business,' she told Reuters at a Le Monde conference.

She added ENGIE was being forced to adjust to lower market prices. 'We are working on our supply chain because prices have fallen and therefore earnings are under pressure,' she said.

ENGIE's Global Energy Management and LNG division, hit by lower oil and gas prices and lower volumes of gas sales, saw turnover fall 47 percent in the first half, leading to a loss before interest, tax, depreciation and amortisation of 39 million euros ($44 million).

French newsletter L'Expansion reported on Monday ENGIE was set to book a full-year loss at this business adding that ENGIE planned to cut about 1,150 jobs in various functions.

Kocher said the company is not planning large-scale job cuts or redundancy plans as part of its shift to renewables, grids and energy services.

She confirmed ENGIE will exit from coal over the next three years but shied away from promising its coal activities would be fully shut by 2018. She also confirmed the company's planned exit from oil and gas exploration, in which it is a minor player.

Asked about ENGIE's nuclear business, Kocher said an investment decision on its newbuild projects in Britain and Turkey will not be taken anytime soon. 'There is a place for nuclear newbuild in the world, but less than before,' Kocher said at the conference.

ENGIE has a 40 percent stake in the NuGen consortium to build three Westinghouse nuclear reactors in Cumbria, Britain. Toshiba has 60 percent in that consortium. It is also part of a consortium to build a nuclear plant in Turkey.

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