The Engie group (ex-GDF-Suez) will not finalize its $ 6.9 billion (5.9 billion euros) contract to import American liquefied natural gas (LNG) over a twenty-year period. The energy company confirmed to World, Tuesday 3 November, the end of commercial discussions with the NextDecade group. This contract was at the heart of a standoff between Engie and the French government, for once discreetly aligned with the positions of environmental associations.
At the end of September, in the midst of the Suez-Veolia battle, the board of directors had to examine the terms of this mega-contract, but the State, Engie’s largest shareholder with 23.6% of the capital, expressed its embarrassment. Hydraulic fracturing, which extracts shale gas, is a prohibited practice in France. The fact of importing them massively by a group in which the State plays an important role would have represented a contradiction for the public authorities – which have just undertaken to no longer provide public export credit guarantees for shale gas or oil projects.
The chairman of the board of directors of Engie, Jean-Pierre Clamadieu, estimated in an interview with Worldat the beginning of October, it was necessary “Relativize” the scope of this contract. “The council asked itself a number of questions, including that of the impact on the environment: the answer is complex”, he explained then, while assuring that “It is not a subject of major debate with the State”.
“Reputational risks”
According to several sources, the representatives of the State would however have threatened to vote against the contract if it was presented in council. When contacted, Bercy did not respond to requests from World. Within Engie, the announcement of this project had aroused very strong reluctance, some seeing it as a contract at odds with the image of champion of the energy transition that the group is trying to build.
“It’s a revolution at Engie, we never take this kind of risk because of the controversy on the subject in France”, was alarmed a very senior executive of the company, who saw “A bad signal”. This project has fueled criticism from those who accuse Jean-Pierre Clamadieu of organizing a “gray” shift, focused primarily on fossil fuels. An accusation strongly denied at the top of the group, where it is assured that this contract was already under negotiation at the time of the former general manager Isabelle Kocher.
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