Wishing to develop in renewables, Engie is selling its GTT nugget
Do you know GTT? A subsidiary of Engie, this SME specializing in the transport of liquefied natural gas is a nugget. It is now on the market.
On October 5, Engie sold 29.9% of its stake in Suez to Veolia. The former GDF Suez, which wants to develop in renewables and gas infrastructure, does not intend to stop there. Two months ago, Jean-Pierre Clamadieu, president of Engie, told Challenges that the energy company was going to "put under strategic review two-thirds of our customer solutions activities, which represents around 13 billion euros of turnover. " This Friday morning, on the occasion of the publication of the third quarter results, Engie announced that the activities of electrical installations, heating, ventilation and air conditioning will be out of the orbit of Engie. The company also announced that it could sell its 40% stake in GTT, a company specializing in containment systems for shipping and liquefied natural gas (LNG) storage, in whole or in part.
A separation that would be a real break because this company created almost 60 years ago has always been in the bosom of Engie. Based in Saint-Rémy-lès-Chevreuse and employing 450 people, Gaz Transport & Technigaz is a nugget. It has a unique membrane insulation system. To compress gas to -163 degrees in tanks, a perfect seal is required. GTT technology has won over nearly three quarters of LNG carriers in circulation. And in recent years, almost 100% of new models have been fitted with membranes. Today, the SME has an order book of 108 LNG carriers. Listed on the stock market in 2014, GTT is worth 3 billion euros (+ 90% in 5 years). Last year its net margin reached 50%. And it progressed further in the first six months of 2020 (56%).
LNG boom
The success story is expected to continue over the next few years. And this thanks to the rise in climate issues. Heavy fuel oil powered boats are thinking about using a more virtuous fuel. To reduce the CO2 footprint, LNG with a membrane tank is an opportunity. Especially for long-distance boats that have huge tanks and have not planned to refuel several times. The first LNG container ship has just been launched: the "Jacques Saadé", from the CMA CGM group. Eight other CMA CGM models will soon follow. The Ponant company, which makes round trips to the North Pole and the South Pole, has also ordered an LNG vessel. As for the German shipowner Hapag Lloyd, he decided to recycle the tanks of one of his container ships by opting for LNG.
The liquefied natural gas boom is still in its infancy. Ships don't really have a choice. As of January 1, 2020, new sulfur regulations oblige fleets to reduce their emissions by a factor of seven. One of the solutions is to opt for LNG which has the advantage of not emitting sulfur. GTT has found the right vein. Last year its turnover was 288 million euros. It could pass the 400 million mark this year. Engie should not have too much trouble finding a buyer for its subsidiary. It just remains to agree on the price.