Liquefied Natural Gas

2 4 8

The benefits of a cleanenergy source

14 16 20

Shipping

22 24

Total, innovating in LNG technology

The LNG market

Regasification

Totals lng activities worldwide

Liquefaction

Trading and marketing

Jean-Marc Hosanski
Senior Vice President, LNG Total Gas & Power

Over the last two decades, liquefied natural gas has grown in importance tobecome a vital element in the global natural gas balance. Consumption of LNG is growing very strongly by about 7% per year anddespite the economic downturn that began in 2008, its share of the gas market is rising steadily as well. LNG met around 7% of world gas demand in 2008 and this figure is projected to rise to nearly 11% in 2015. The traditional LNG markets (Northeast Asia, Europe and North America) aswell as emerging markets (India, China and South America) clearly appreciate theadvantages of an energy source that is at once energy-efficient, clean, and aseasy to transport as liquid hydrocarbons. In this context of strong growth, Total, which was among the LNG industry pioneers, is backed by very solid positions in the upstream and downstream segments of the gas chain. Our objective is to increase our LNG production by developing new projects. Inthis respect, 2009 has been a watershed year for Total: thestartupof two major liquefaction projects Qatargas2 and Yemen LNG willinthe short term allow the Group to boost its LNG production by 50%. Otherprojects under way or under study in Nigeria, Angola, Australia, Russia and Iran will permit thepursuit of production growth through the decade 2010-2020. Our ability to guarantee sales for our liquefaction projects is a decisive advantage inmeeting these objectives, which is why we have been strengthening ourdownstream LNG presence. Total has acquired interests in fourreceiving terminals in India, Mexico, France and the United Kingdom andhasreserved large-scale regasification capacity in a terminal in theUnited States. Wearenowstudying further import terminal projects, including oneinCroatia intended tosupply Southern Europe. By consolidating our portfolio of customers in these growing markets and securing physical access to markets as well, we are in a position to purchase LNG ourselves, thereby facilitating the launch of new upstream projects.

THE BENEFITS OF A CLEAN ENERGY SOURCE

Global demand for natural gas is growing faster than demand for otherfossil fuels, largely because of its environmental advantages. Combustion ofnatural gas does not produce heavy unburned compounds and also generates less greenhouse gas emissions, thanks to its high hydrogen content.

Gas-fired power plants not only help to meet steadily expanding demandfor electricity, with savings in construction time and capital costs, but withcogeneration and combined-cycle technologies, theyalso have limited environmental impact because they are extremely energy efficient. Thismeans that more usable energy is produced fromless natural resources. Leveraging natural gas resources is therefore acritical challenge.

Safety throughout the LNG chain

Production, handling, transportation and storage of LNG and this is true ofallinflammable substances involve unavoidable risks. So all possible care istaken during project design and daily operations to maintain the highest possible safety standards.

Maintaining integrity
Everything about an LNG project choice of sites for the liquefaction plant, loading facilities and regasification terminal; sizing of equipment; selection of technologies to be used is carefully studied so as to ensure optimum asset integrity. Meteorological extremes and seismic risks are alsoduly taken into account. Optimum safety distances are calculated for each plant site, provision is made for permanent monitoring, and emergency equipment, such as retention tanks and fire-fighting systems to curb the consequences of a potential leak, are always included. Total is participating in a number of advanced research projects to more accurately assess risks and thereby improve facilities design, operating procedures and, where necessary, evacuation conditions. TheGroup also contributes to the industrys international initiatives to enhance LNG shipping and storage safety through its participation in the Society of International Gas Tanker and Terminal Operators ( SIGT TO ), which oversees compliance with stringent construction and operating standards for LNG carriers and terminals.

Patrice Lecomte
Senior Vice President, Health, Safety, Environment&Sustainable Development, Total Gas&Power

The application of thehighest safety standards in the design and construction of the facilities, constantly improved risk management and the promotion of a strong safety culture in our operations are basic rules and imperatives. Totalimplements internationally recognized safety management systems that demand constant vigilance and a commitment to progress.

THE LNG MARKET

LNG trade has grown at a remarkable pace. Traded volumes have increased at an average rate of around 7% a year from 2000 to 2008 and exceeded 230billion cubic meters in 2008.

LNG, helping to interconnect gas markets

The world gas market is still basically regional and characterized by long-term contracts and different pricing formulas in each zone, but this regional separation is now weakening. This is because cargos of LNG, unlike pipeline gas, can be easily diverted to a new destination, with the strong increase in logistic capacity in the past few years (LNG carriers and regas terminals) now futher enhancing flexibility. Therefore it is possible to arbitrate between different import markets and sell at the best price. The LNG segment thus plays a balancing role between world gas markets. So far, this arbitrage phenomenon involves only limited volumes of gas but its importance will grow as the share of LNG in world gas consumption increases. This will result in a much stronger correlation between markets that were previously independent. Indeed, this can already be observed between the United States (Henry Hub) and the United Kingdom (NBP).

New opportunities and new markets

The relative importance and the role played by LNG differ significantly in the three main markets: Asia, Europe and North America. Nevertheless, LNGs growth potential in each region is high, for a variety ofreasons. At the same time, new markets are emerging.
In Europe
At present, LNG accounts for 10% of gas demand (and 22% of impor ts). But this percentage is increasing steadily and LNG consumption is projected to increase ver y significantly in the coming years, rising from 57billion cubic meters in 2008 to 130billion in 2015. Market liberalization is re modeling the landscape. New customers are emerging, numerous receiving terminals are being built, and even though long-term contracts are still the rule, there is strong grow th in shor t-term and spot trades.

In Asia
LNG satisfies nearly all gas demand in Japan, South Korea and Taiwan, which together account for around two-thirds of the world market. Northeast Asia is a mature market, long dominated by national and regional impor t monopolies but now experiencing sweeping changes from increased competition between regional players. As monopoly positions are being challenged more and more, a need has arisen for more flexible and diverse supply mechanisms, with more emphasis on short- and medium-term contracts in particular. The Chinese and Indian markets offer extraordinary growth potential for the LNG industry in Asia. Japan, a thirst for LNG Japan has been the worlds largest importer of LNG fornearly 40 years. In 2008, the country accounted for 40% of the global market, importing 69 million metric tons, up 3% from 2007. With 2/3 of imports used for power generation and 1/3 fed into the grid for industrial, commercial and household use, LNG currently meets a little more In China, demand for gas is growing fast and neither the countrys dynamic domestic production nor its pipeline import contracts can meet current needs. In this favorable context, LNG imports are expected to increase by an estimated 15% a year. China is now securing its imports via a growing number of long-term LNG purchase contracts and is building the necessar y receiving facilities. In India, the steady grow th of energy demand and insufficiency of domestic gas resources, at least in the short term, are spurring interest in LNG, particularly for power generation. than 13% of Japans primary energy needs. Given this countrys energy security and environmental concerns, Japans LNG impor ts are bound to incre ase even further in the coming decades. To handle the growing i m p o r t v o l u m e s , J a p a n a l r e a d y b o a s t s 27 L N G receiving terminals (a record that is likely to stand for some time ) and additional facilities are now under construction.

Masaki Yamada
LNG Marketing Manager, LNG Division, Total Gas & Power

In the early 2000s, the first signs of deregulation in Japans energy sector, strong growth in Asian LNG markets and stiffer competition among LNG producers led Total to strengthen its LNG marketing presence inJapan. An LNG office was set up in Tokyo to capitalize on the proximity of the LNG players in Northeast Asia (Japan, South Korea and Taiwan), which is still the

biggest import market in the world, and to leverage newgrowth opportunities in the region. The specific mission of the Tokyo office is to analyze market trends, identify new opportunities for short, medium and long-term supply contracts, and make appropriate marketing recommendations to other Totalunits, working closely with the LNG team in Paris. Our local presence also means that Total can respond faster to new trading opportunities, incooperation withTotal Gas&Power Ltd.

In North America (Canada, United States, Mexico)

Until recently, LNG played only a marginal role in North Americas overall natural gas consumption, with annual imports fluctuating between 10 and 25 billion cubic meters, depending on demand and the price of local pipeline gas. However, the situation is evolving rapidly. In the last few years supply has diversified (input of nonThe United States: regulator of global LNG flows? With the start-up of numerous new LNG projects launched in the mid-2000s in Qatar, Yemen, Russia, Indonesia, available volumes of LNG will increase spectacularly in2010-2012/13. In some markets, this will temporarily lead to a supply surplus. Given the flexibility and the considerable size of the US gas market (three times larger than the world LNG market), the United States will no doubt play a key role in absorbing a significant part of conventional gas) and major regasification capacity has been added. Factoring in the steady growth in gas demand in this zone, as well as the important role being played by non-conventional gas (attractive at varying prices) in U.S. domestic gas production, demand for LNG is expected toreach 40 to 70billion cubic meters by 2015. these LNG volumes. This additional inflow of LNG will serve, among other things, to drive incremental market growth. It can also be expected to prompt new competition between gas and coal as fuel for power generation, as well as a reconfiguration of domestic gas production (shutdowns of the least profitable gas fields). Conversely, if demand for LNG were to rise (and prices with it), the supply-side flexibility enjoyed by the United States would enable this country to free up quantities of LNG for other markets to buy.

A BOOMING ENERGY SEGMENT

Today, LNG accounts for more than a quarter of the international gas trade, a figure that is forecast to rise

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to by 2015. Volumes are projected to grow by around 7% a year.

South America: an emerging market

In the Southern Cone (Argentina, Brazil, Chile), gas imports are still very modest and mainly used to meet swing demand during the colder months. But the Southern Cone is seeking to secure and diversify its gas supply and could increase gas imports in the coming years. One particularity here is the regions strong interest in offshore regasification facilities, which involve both shorter construction lead times and less heavy capital investment.

Total and LNG: A success story of nearly 50 years

TheLNG industry was born at Skikda in Algeria during the 1960s with a project intended to supply the UK and French markets. Involvement in this world first gave the Group an early lead in LNG expertise. A few years later, Total was also a player in the LNG boom in Asia and the Middle East triggered by Japans decision to give preference to LNG. The Group was thus involved in construction of the Bontang plant in Indonesia and the Adgas project in Abu Dhabi. Both plants started up in 1977 and were decisive steps in the Groups gas strategy. Total subsequently participated in major projects in Qatar, Nigeria, Oman, Norway and Yemen and gradually broadened its portfolio of activities to become a leading LNG player.

5.4%
Totals share of the world LNG market in 2008. The Group marketed 9.15million metric tons of LNG, making itone of the top three international companies inthis market.

26,218

BCF (Billion cubic feet)

Totals proved reserves of gas at the end of 2008

LIQUEFACTION
Colorless, odorless and non-toxic LNG mainly consists of methane (more than 75%) along with ethane, propane, butaneand nitrogen (less than 1%).

Gas is transported from the field by pipeline then processed to remove liquid condensates, acid (CO 2, H 2S and other sulfur compounds) and water. In addition, its mercury content, which can corrode the alloys used in equipment for subsequent stages of the process, is also removed. Heavy hydrocarbons (condensates) and any liquefied petroleum gas (propane and butane) are isolated via precooling and fractionating in a series of distillation processes. The gas then undergoes heat exchanges in a series of refrigeration cycles, becoming liquid at around -160C. Then it is stored at atmospheric pressure until it is loaded on an LNG carrier.

The LNG has to meet stringent commercial specifications that can vary depending on the destination market. These specifications include heating value andWobbe index, which characterizes the combustion properties of the gas.

Liquefaction plants comprise different sections for the successive operations, which include gas purification, liquefaction and storage as well as port infrastructure. The equipment used is very large, requiring specific mate r ia l. A pprox imate l y 10 % of the natu ra l g a s arriving at a liquefaction plant is consumed for its own operations.

Christophe Thomas
Head of the LNG department, Strategy, Business development, Engineering and R&D division, Total Exploration & Production

Total enjoys an international reputation for its LNG proficiency, acquired during many years of active technical participation in a large number of LNG projects involving a variety of technologies, in many different countries. For more than 40years now we have been involved in all the main technological advances, thathave taken the industry from the first small ADGAS and Bontang liquefaction trains to the large-capacity trains now operational in Qatar.

Alternative liquefaction processes are now challenging thenear-absolute domination of the C3-MR process originally developed by Air Products & Chemicals Inc. (APCI). Anoutstanding characteristic of Total is ourinvolvement inprojects using the five or sixmain processes currently available on the market. We are determined to maintain complete freedom of choice, which doesnt prevent usfrom working on improvements to enhance process efficiency. Given the capital-intensive nature of the LNG projects, wehave to be more rigorous than ever in the preliminary phases preceding the investment decision. Nevertheless, forecast future demand for LNG naturally encourages Total to consider liquefaction projects in increasingly difficult locations such as the Barents Sea that require us to devise innovative technological solutions such asmodular plant construction and transfer systems thatcan be used in the open sea.

Units making up a liquefaction plant

H 2 S & CO 2 Removal
Feed Gas Absorber & Regenerator H 2S CO 2 K.O.D. LNG LNG

Dehydration
H 2 O & Hg Removal

Cooling
Scrub Columm

Liquefaction
Main Heat Exchanger

Storage
Boil off

LPG
Deethanizer Depropanizer Debutanizer

LPG

Propane Refrigeration

MCR Refrigeration

LNG takes up 600times less space than natural gas in its gaseous state but contains the same amount of energy. SoLNG can be transported at atmospheric pressure at a temperature of -160Caboard purposebuilt ships to terminals where it is regasified andfed into the natural gas transmission grid.

Fractionation

C5+

Totals net LNG production in 2008 added up to more than 9millionmetric tons. With the start-up of two major Middle East liquefaction projects, Qatargas 2 and Yemen LNG, the Groups LNGproduction willincrease by 50% in the short term. This will lift the Group into ahigherleague, strengthening our position as a leading playerin the LNGindustry and a major producer in the Middle East.

Qatargas 2, the worlds first integrated LNG project

As a pioneer of Qatars gas industr y, Total was the driver behind Qatargas (later to become Qatargas1) in 1984. With its three trains and an overall capacity of 9.9million metrictons peryear after debottlenecking, Qatargas is continuing to expand via the Qatargas2, 3 and 4 projects involving different international partners. The aim has been to remain the worlds largest supplier of LNG. Qatargas 2, the worlds first integrated upstream / downstream project, was inaugurated on 6April 2009. The project involves three unmanned offshore platforms, two liquefaction trains each with a capacity of 7.8million metric tons per year, 14 Q-Flex (215,000cubic meters) and Q-Max (265,000cubic meters) LNG carriers, and the South Hook regasification terminal in the United Kingdom. Total is a 16.7% partner in the second train of Qatargas2, alongside the national company Qatar Petroleum (65%) and ExxonMobil (18.3%). The Group also has an 8.35% shareholding in the South Hook terminal and has contracted with Qatargas2 to purchase 5.2million metric tons of LNG per year for a period of 25years. This LNG will play a significant role in meeting Totals gas supply commitments in the Atlantic Basin ( France, United Kingdom, North America).

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An exemplary project

Yemen LNG: a newcomer on the LNG scene

Yemen LNG is by far the most ambitious project ever undertaken in this country and Total is playing the leading role. The Balhaf liquefaction plant on Yemens south coast has t wo trains with a combined capacity of 6.7million metric tons per year. The feedgas is produced in the central region of Marib, 180kilometers east of Sanaa, and transported to the coast via a 320-kilometer pipeline. After nearly four years of construction work, Yemen LNG star ted its commissioning operations in summer 2009. A s th e l a rg e st s h a re h o l d e r i n Ye m e n L N G Company Ltd, Total (39.62%) is project leader, playing an active part in its development. The Group provided assistance in all key areas (technical, marketing, finance) and seconded personnel to occupy key positions in the company, including that of General Manager. Total Gas&Power has also signed a long-term sales and purchase agreement with YLNG to lift 2million metric tons of LNG per year over 20years. Most of the gas will be shipped to Atlantic Basin markets.

One of Totals top priorities in all projects is to minimize the impact of its activities on the environment and the local communities. The site location for the Yemen LNG liquefaction plant was chosen after studies carried out in consultation with stakeholders (local communities, the authorities, international experts). The plant and associated infrastructure were designed for minimized impact on biodiversity and marine currents. Total also helped to implement a Coastal Zone Management Plan devised by the World Bank to conserve the Gulf of Aden coastline. At the same time, sustained efforts were made to integrate all project activities into the local socioeconomic fabric. Starting in 2006, Yemen LNG implemented a wide-ranging recruitment and training program for local technical personnel. The company has set up its own training center and trained some 200 technicians and operators (among others) who will be working at the plant. Yemeni nationals already account for nearly two thirds of all Yemen LNG personnel and the company aims to raise this to 90% in time. The same attention is being paid to gender diversity, and women already account for more than 25% of the personnel at Yemen LNGs head office in Sanaa.

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Top priority for Total is to increase its LNG production anddevelop new liquefaction capacity. Several new projects are underconstruction or under study.

6 5 4 1 2

Angola LNG (Angola)

A joint project of Sonangol (22.8%), Chevron (36.4%), BP(13.6%), Eni (13.6%) and Total (13.6%), Angola LNG will process associated gas from oil-producing offshore blocks (Total E&P Angola operates some of these offshore fields and holds a stake in others) and from gas fields dedicated to the project. The gas from offshore fields will be collected and piped to a liquefaction plant currently under construction in Zaire province. The plant will produce up to 5.2million

metric tons of LNG per year, along with associated liquids, and production start-up is planned for 2012. Seven LNG carriers chartered by the project will transport the LNG to the Gulf LNG Energy regasification plant now under construction near Pascagoula in Mississippi (United States). Once regasified, the LNG will be sold to the project partners commercial subsidiaries in the United States. Total Gas & Power North America will purchase and market Totals share of the gas.

Ichthys LNG (Australia)

Total is a 24% partner in the Ichthys offshore gas field, located in the Browse Basin about 200kilometers off the northwest coast of Australia. Total and its partner Inpex (76%, operator) have launched basic engineering studies for thedevelopment of the Ichthys field and theconstruction of a liquefaction plant near Darwin, 850kilometers to the east. These studies will be the basis for contracts to build the production, processing, transport and liquefaction infrastructure. The development scheme will include subsea wellheads connected to a Central Processing Facility based on a semi-submersible platform, a Floating Production Storage and Offloading unit (FPSO) for the condensates and a gas pipeline to the liquefaction plant,

which will be built near Darwin. The plant will initially have 2 trains with a combined capacity of about 8.4 million metric tons per year of LNG, but provision will be made to include 4 additional trains. The Darwin plant will also produce 1.6 million tons per year of LPG (butane and propane) as well as condensates. The Ichthys plant is expected to operate for about 40years and will make a significant contribution to the local economy, employing more than 2,000 people during the construction phase and about 300 people once the plant is operational. The Ichthys project is expected to go into production halfway into the decade 2010-2020, and the LNG should be shipped to Asian markets, mainly Japan.

Shtokman (Russia)

In July 2007, Total and Gazprom signed an agreement for the first phase of development of the giant Shtokman gas and condensates f ield in the Barents Sea. In February 2008, the Shtokman partners set up a new company, Shtokman Development AG (Total 25%), to design, construct, finance and operate this first phase

of development. Engineering studies are currently under way. The first phase of development targets a production of 23.7billion cubic meters of gas per year, about half of which (7.5million metric tons per year) is to be exported in the form of LNG.

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Brass LNG (Nigeria)

Total is a 17% par tner alongside Nigerias national company NNPC, Eni and ConocoPhilips in the Brass LNG project in the Niger Delta ( Nigeria). The project involves two trains, each with a capacity of 5 million metric tons per year, and will export most of its LNG production to the European and American markets. Feedgas will come from the upstream gas operations of

project partners, with Total having the right to provide half the gas. The plant is expected to start producing in the middle of the decade 2010-2020. Details of gas supply for the project are currently being finalized. The engineering studies have been completed and preparation of the plant site is under way. Total Gas &Power will be among the buyers of the LNG produced.

Nigeria LNG train 7 (Nigeria)

Total has a 15% interest in the Nigeria LNG liquefaction plant on Bonny Island. The plant, which already includes six trains, has a production capacity of 22million metric tons per year. Studies for a project to add a 7 th train

witha capacity of 8.5million metric tons per year are under way. Total Gas&Power has signed a 20year purchase agreement with Nigeria LNG to lift 1.375million metric tons per year of the LNG produced by the future train7.

Pars LNG (Iran)

Total is lead partner for the Pars LNG project in Iran, with an interest of 30%(1). The other partners are Petronas and the national oil company NIOC. The project involves the construction of a liquefaction plant 60kilometers northwest of Assaluyeh. The plant, with twotrains producing 5million metric tons per year each, will take feedgas from Block11 of the offshore South Pars field, which will be developed

under a buy-back agreement, with Total also participating in the development. Half the LNG will be exported to the Asia-Pacific Basin and half will be shipped to Europe. Basic engineering studies have been completed and discussions are under way with NIOC on the contractual framework.
(1) Company estimates after LNG buyers entered the project

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Moss Rosenberg LNG carriers

Moss Rosenberg LNG carriers feature selfsupporting spherical cargo containment systems. These tanks are made ofthick aluminum plates thatare welded andinsulated. They are attached to theships double hull using a steel skirt at the spheres equator, equipped withathermal brake made from a special alloy.

SHIPPING
Total has gained very solid experience in this key link in the LNG chain through its participation in a large number of projects. Safety requirements and the growing importance of controlling transportation ina more flexible LNG market have led the Group to become more directly involved inshipping.

Dedicated technologies
The need to transport large volumes of liquefied gas over long distances, at very low temperature and in conditions of the utmost safety involves major technical constraints. In particular, LNG carriers require the most efficient insulation possible, both to prevent the LNG from warming up and to protect the adjacent vessel structures from excessive chilling. As a result, only about a dozen shipyards worldwide are able to build LNG carriers. These vessels, costing between $200million and $250million each, are the most expensive cargo ships in the world. World LNG shipping capacity is growing fast, with a fleet of 305 vessels in operation and 76newbuilds on order in June 2009. The major South Korean shipyards dominate the building market. There is also a trend towards larger vessels; the standard size has risen from 125,000cubic meters to 165,000cubic meters, and a number of vessels with capacities ranging from 215,000 cubic meters (Q-Flex) to 265,000 cubic meters (Q-Max) have been built for the Qatar projects in which Total is a stakeholder.

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An increasingly strategic challenge

W ith the d eve lopm e nt of long e r LNG c ha ins a nd tra nspor tation to eve r more re mote d e stinations, shipping accounts for an increasing share of LNG industr y capital expenditure and operating costs. In addition, c ontro lling tra ns por tation c re ate s va lu e because players can redirect ships to take advantage of regional price dif ferences through arbitrage transactions, which are growing rapidly. However, the growth of the LNG segment depends on companies maintaining an excellent shipping safety record and complying with ver y stringent standards concerning shipbuilding and crew qualifications.

Membrane LNG carriers

Membrane LNG carriers use a technology developed by Gaz Transport & Technigaz, in which Total has a 30% stake. The LNG is contained by a thin double metal barrier, or membrane, that creates liquid-tight containment barriers and maintains its mechanical properties at low temperature. Loads are transferred to the double hull by the insulation, which protects the structure from the cold. The tank shape is designed to make optimal use of the available space on the vessel.

Total and LNG carriers

1973: Signature of the first long-term charter agreement for a Total project (ADGAS/LGSC) 1986: First spot charter agreement, for a cargo from Bontang in Indonesia for delivery to Boston (world distance record for the LNG carrier Pollenger) 1990: First acquisitions of vessels (Gastor andNestor) for an Elf project (Nigeria LNG) 2002: Signature of a first long-term agreement directly by a Total subsidiary (Total E&P NorgeforSnhvit LNG) 2002: First short-term charters by the Londontrading team (Hyundai Oceanpia, OmanZeebrugge) April 2006: Delivery of the Arctic Lady, a147,000-cubic-meter LNG carrier, thefirstvessel chartered by Total itself to transport the Groups production of LNG from Snhvit inNorway. March 2009: Yemen LNG, where Total is thelead shareholder, begins long-term charter of four 160,000-cubic-meter LNG carriers. Totalpersonnel supervised construction.

Jacques Besse
Vice President LNG Shipping, Total Gas & Power

Since 1995, through its stakes in various LNGschemes Total has been involved in numerous LNG transport operations and we have acquired expertise in developing new projects. With Snhvit wereached a new milestone, chartering our first vessel (Arctic Lady), which will form the basis of a fledgling fleet that is expected to grow as new projects are undertaken. A large team of experts was also set up tosupervise the construction ofthefour LNG carrierson charter to Yemen LNG. In addition, the increase in LNG trading has created aneed for short-term charters. Totals Vetting Department is actively involved inverifying that our shipping operations comply with themost stringent safety standards. Six Total experts are in the field on a daily basis, supervising fleets andship-owners to ensure that the vessels are inprime condition and the crews fully trained.

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REGASIFICATION
Total has regasification capacity in all three main gas markets: NorthAmerica, Europe and Asia. This direct access to a number of different markets has allowed the Group to consolidate its downstreamportfolio. It is also a key advantage for the development ofnew liquefaction projects.
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Securing access to consumer markets

Regasification logistics are critical to securing access toend markets. The steps taken by the Group demonstrate Totals commitment to strengthening its presence in this vital linkof the LNG chain and are part of an overall process designed to secure outlets for the Groups production from the Middle East, the Gulf of Guinea, northern Europe and the Asia-Pacific region. This is why Total, which already uses the Bilbao and Barcelona terminals in Spain, has acquired interests or reserved capacity in a number of terminals in the worlds main consumer regions : Indias Ha zira terminal, operational since 2005; Mexicos Altamira facility, which came on stream in late September 2006; and in Europe, the South Hook terminal (United Kingdom), which became operational in 2009, and the Fos Cavaou terminal (France), due to go into service in late 2009. Total is also studying a project for a third European facility, in Croatia. In the United States, Total has signed up for large-scale reser ved capacit y at the Sabine Pass terminal in Louisiana, on the Gulf of Mexico.

LNG receiving terminals comprise offloading installations, cryogenic storage tanks, pumps and LNG regasification units.

The LNG is heated from 160C to just above 0C at high pressure (between 60 and 100bars), usually using seawater percolation heat exchangers, a technique that is highly energy efficient. The LNG can also be heated by burning some of the gas.

When the gas leaves the terminal, its heating value is adjusted by blending with other stored gases b e fo re i t i s re g a s i f i e d a n d, i f necessar y, by adding nitrogen, butane or propane before the gas is fed into the distribution grid.

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SOUTH HOOK

SABINE PASS

HAZIRA

SOUTH HOOK (UNITED KINGDOM)

Totals equity interest: 8.35% Capacity: 21 bcm/year Start-up: 2009
The South Hook terminal in Milford H ave n ( Wa le s ) is the la rg e s t regasification complex in Europe and can accommodate todays biggest LNG carriers (Q-Flex: 215,000cubic meters, and Q-Max: 265,000 cubic meters). Total has an 8.35% interest in the terminal, alongside Qatar Petroleum (67.5%) and ExxonMobil (24.15%). The terminal, with a total capacity of21 billion cubic meters per year, isdesigned to regasify production from Qatargas 2. It will receive Totals share of production from the second Qatargas 2 train, that the Group plans to market in the United Kingdom. South Hook can fulfill up to 20% of Britains overall gas needs, offering the country (and indeed Europe as a whole) a much more secure and diversified supply of gas.

SABINE PASS (UNITED STATES)

Capacity subscribed by Total: 10bcm/year Overall capacity: 26 bcm/year (Phase1) then40bcm/year (Phase2) Start-up: September 2008 (Phase 1) then3rdquarter 2009 (Phase 2)
As of April 2009, Total has 10billion cubic meters per year of regasification capacity in the Sabine Pass terminal, built and operated by a subsidiary of Cheniere EnergyInc. The facility can accommodate the biggest LNG carriers currently operating (up to 265,000cubic meters) and is equipped with three 160,000 -cubic-meter storage tanks (Phase 1). Two more similar storage tanks will be available by the end of the 3 rd quarter 2009, when Phase2 is due to be completed. In addition, Total has also reserved equivalent capacity in a downstream pipeline. This gasline will tie the terminal into a number of natural gas trunklines, thereby securing access to the main gas markets in the northeast United States. Total has also signed up for 0.06 bcm capacity in salt-cavity storage facilities located at the end of the pipeline.

Blending into the local environment

The South Hook terminal has five storage tanks each holding 155,000 cubic meters of LNG that is maintained at a temperature of 160c thanks to double concrete walls. The tanks, 41meters high and 100meters across, have been built in a small valley amid cliffs so as to minimize their visual impact: a very successful idea because they are hardly visible from the nearest village. At peak construction, nearly 2,400people were employed at the site, 40% were recruited locally. Once the terminal is fully operational, 80people, mostly recruited locally, will be employed at the site, where about 160LNG carriers are expected to come in per year, orone every two days.

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ALTAMIRA

FOS CAVAOU

HAZIRA (INDIA)
Totals equity interest: 26% Capacity: 5 bcm/year Start-up: 2005
I n d i as s e c o n d r e g a s i f i c a t i o n terminal, Hazira is located in Gujarat state on the countrys northwest coast. Designed to handle 5billion cubic meter s of gas per year, it may later be expanded to process 8 billion cubicmeters per year. Gas arriving at Hazira is sold directly to end-users (power companies, industrial users, fertilizer manufacturers) as well as to local gas companies.

ALTAMIRA (MEXICO)
Totals equity interest: 25% Capacity: 6.7bcm/year Start-up: 2006
Located on the east coast of Mexico, the Altamira regasification terminal came on stream in fall 2006. With a jetty and two 150,000-cubic-meter storage tanks, its initial capacity is 6.7 billion cubic meters per year. The site configuration will allow construction of the third storage tank, which would double the capacity of the terminal. The natural gas from Altamira is sold to the Mexican electricity utility, under a long-term contract, to supply several gas-fired thermal power plants.

FOS CAVAOU (FRANCE)

Totals equity interest: 29.8% Capacity: 8.25bcm/year Start-up: late 2009 (e)
This terminal, in Frances Fos-surMer industrial zone on the Cavaou peninsula, is being built by the Socit du Terminal Mthanier de Fos Cavaou (STMFC), a joint-venture subsidiary of GDF Suez and Total. The facility will have three 110,000-cubic-meter tanks, and regasification will be carried out by three seawater regasifiers (this technology prevents CO2 emissions). The new terminal will mainly handle Totals Middle East production.

ADRIA LNG (CROATIA)

Totals equity interest: 25.58%. Capacity: 10 bcm/year Start-up: 2015 (e)
In October 2007, Total became a shareholder in a new company, Adria LNG, set up to carry out studies for construction of an LNG import terminal on the coast of Croatia. The other partners in the venture are E.ON Ruhrgas (31.15%), OMV (25.58%), RWE (16.69%) and Geoplin (1%). The terminal is expected to be built on the island of Krk on Croatias northern Adriatic coast. This terminal, located at the door to Central Europe, will be very well placed to serve Italy and Germany as well as markets in the immediate region.

19

TRADING AND MARKETING

The globalization of energy markets has radically transformed marketing practices in the LNG industry: the opportunities for trading have expandedconsiderably, the number of players has increased and business models havebeen adapted very rapidly to the new environment. LNGnowaccounts for 27% by volume of world gas trade.

A changing environment
The rigid contractual relationships that previously g ove r n e d s u p p l y a g r e e m e n ts a r e s te a d i l y b e i n g rewritten. Buyers are now seeking greater flexibility in terms of pricing formulas and cargo redirection clauses and both buyers and producers prefer a combination of long-term, shor t-term and spot contracts. This environment is more conducive to arbitrage transactions, with the growing number of spot deals now accounting for 15% of worldwide trade.

New marketing skills in an environment requiring rapidresponse

From the start, Total realized just how important LNG would become in the international gas trade picture. Building on its recognized expertise in trading crude oil and petroleum products, Total is now consolidating its LNG trading operations on both sides of the Atlantic Basin and in the Pacific zone too. The Groups objective in terms of LNG marketing is to optimize the flows from its worldwide por t folio by leveraging the trading skills that have been acquired and consolidated over the last few years.

20

Total is consolidating its portfolio of purchases from producers and sales to consuming countries with the aim of marketing more than 100cargos (vessels of all sizes) per year in 2010.

Patrick Dugas
LNG Trading Manager, Total Gas & Power Limited, United Kingdom

We handle all types of LNG transactions for theGroup, including direct purchase of LNG cargos at loading ports or receiving terminals, ship chartering, capacity reservation at regasification facilities for resale in local markets, and spot or short-term purchases/sales. Total has a growing LNG portfolio, with new LNG plants starting up, particularly in 2009 with Qatar and Yemen. Over the years, we have also developed skill in geographical arbitrage transactions and also (mainly for operational purposes) commodity arbitrage (pipeline/liquefied gas arbitrage). Our aim here is to optimize ouruse ofavailable volumes depending on the constraints and opportunities in the marketplace at any given time.

21

TOTAL, INNOVATING IN LNG TECHNOLOGY

Total is participating in numerous LNG research projects focused mainlyon improving safety, optimizing the thermal efficiency of theLNG chain and reducing costs. To further enhance competitiveness, Totalhas also launched R&D programs on actual liquefaction processes, development of resources in challenging geographic environments and innovative infrastructure for LNG transfer and storage.

Meeting the growing challenges of resource development Research here has three main thrusts: Firstly, offshore liquefaction. This is a very topical theme for Total, which is looking closely at the concept of a floating offshore liquefaction plant and has awarded a contract to a leading specialist engineering company for the conceptual design of a floating LNG plant (offshore liquefaction facilities on a floating hull) and an innovative LNG transfer system operating in open-sea conditions. On two upcoming liquefaction projects Total also proposes to use modular construction techniques, which have significant advantages in remote sites and/or those where work is particularly difficult or costly. Lastly, the promising outlook for Arctic gas reserves has prompted Total to study possibilities for establishing LNG plants in severe climatic conditions, where challenges include, among others, very wide temperature ranges and seas that are ice-bound a large part of the year.

22

Simplifying transfer systems Two other aims of Totals R&D are to simplify LNG transfer systems and to ensure that current systems can be used in a greater range of environments. Total has worked on the development of an LNG transfer system that can be used in open-sea conditions. The system uses a flexible LNG pipe and a light connect/ disconnect apparatus that incorporates the safety systems used in conventional LNG terminals. The Group is also a partner in the Floating LNG Line Joint Industry Program looking at an array of attractive solutions for transferring LNG at sea without the need for overhead transfer (loading boom with flexible LNG line). And for a number of years now, Total has been actively supporting a project to develop a pipe-in-pipe-type subsea cryogenic transfer line. This environment-friendly, cost effective solution has been chosen for the Brass LNG project in Nigeria.

Improving LNG storage systems Storage whether at the liquefaction site or at an import terminal is a vital link in the LNG chain. Total is involved in a number of research programs to improve safety, insulation and construction techniques of cryogenic storage tanks. Lined rock cavern storage has the potential to store large volumes of LNG with only minimal surface facilities required. Geostock, a company in which Total has a 50% share, has helped to test a 15-cubic-meter pilot unit in South Korea. The pilot has now validated the concept and cavern storage is expected to move to the commercial phase. Automation and standardization of the construction of membrane tanks has generated new interest in this technique, mainly for use in projects in difficult zones (the Arctic) or countries with high labor costs (Australia). Evaluation of new construction methods has also led to new solutions that can be optimized to suit site conditions or availability of local labor. For example, construction of a double-walled concrete envelope can reduce the amount of special steel required, as well as special welding techniques, thus allowing a project to use local manpower.

Improving energy efficiency along the whole LNG chain

For both financial and environmental reasons, liquefaction projects require engineering studies thatallow the management of each new project to quantify technically feasible gains and see how they stand up to the current economic realities of the LNG market and the construction market. Total is also evaluating techniques that could improve the energy efficiency of receiving terminals while reducing greenhouse gas emissions and recovering the energy contained due to extreme cooling during liquefaction.

23

Totals LNG activities worldwide

Flows

Regasification terminals Liquefaction plants

17 SABINE PASS
USA

16 ALTAMIRA
Mexico

Regasification terminals
Site 15 HAZIRA (India) 5 Bcm/year 26% 2005 16 ALTAMIRA (Mexico) 6.7 Bcm/year 25% 2006 17 SABINE PASS (USA) 26 Bcm/year (phase 1) 40 Bcm/year (phase 2) Capacity suscribed byTotal: 10Bcm/year 2008 18 SOUTH HOOK (United Kingdom) 21 Bcm/year 8.35% 2009 19 FOS CAVAOU (France) 8.25 Bcm/year 29.8% End 2009 (e) 20 ADRIA LNG (Croatia) Project under study 10 Bcm/year 25.58% 2015 (e)

Total capacity Totals equity interest Commissioned/ planned

Liquefaction plants
Site 1 ADGAS (Abu Dhabi) 5.6 Mt/year 3 trains 2 BONTANG (Indonesia) 22.2 Mt/year 8 trains 3 QATARGAS (Qatar) 9.9 Mt/year 3 trains 4 NIGERIA LNG (Nigeria) 21.9 Mt/year 6trains 5 OMAN LNG QALHAT LNG (Oman) OLNG: 7.2 Mt/year 2 trains QLNG: 3.7 Mt/year 1 train 5.54% (T1/T2) 2.04% (T3) 2000 (T1/T2) 2005 (T3) 6 SNHVIT LNG (Norway) 4.2 Mt/year 1 train 7 QATARGAS 2 (Qatar) 15.6 Mt/year 2 trains 8 YEMEN LNG (Yemen) 6.7 Mt/year 2 trains

Total capacity

TOTALs equity interest Commissioned/ planned

5%

Total supplied 40.8% of thegas in 2008 1977

10%

15%

18.4%

16.7% in the second train 2009

39.62%

1977

1996

1999

2007

2009

24

Snhvit LNG
Norway

11

Shtokman
Russia

SOUTH HOOK 18 United Kingdom

Fos CAVAOU
France

19

20 ADRIA LNG
Croatia

QATARGAS 2
Qatar

PARSLNG 14 Iran

OMAN LNG QALHAT LNG

Oman

QATARGAS
Qatar

HAZIRA 15 India

NIGERIA LNG Nigeria

4 12

ADGAS

Abu Dhabi

NIGERIALNG (train7) 13 Nigeria BRASSLNG

Nigeria

2 8

YEMEN LNG
Yemen

BONTANG
Indonesia

9 ANGOLALNG
Angola

10 ICHTHYSLNG
Australia

Projects and extensions under study

9 ANGOLA LNG (Angola) Under construction 5.2 Mt/year 1 train Site 10 ICHTHYS LNG (Australia) 8.4 Mt/year 2trains 11 Shtokman (Russia) 7.5 Mt/year 12 BRASS LNG (Nigeria) 10 Mt/year 2 trains 13 NIGERIA LNG train 7 (Nigeria) 8.5 Mt/year 1 train 14 PARS LNG (Iran) 10 Mt/year 2 trains

Total Capacity

13.6%

Totals equity interest

24%

25%

17%

15%

2012 (e)

30% (Company estimates after LNG buyers entered the project)

Liquefied Natural Gas

Total S.A. Share capital: Euros 5,867,520,185.00. Registered in Nanterre: RCS 542 051 180. Printed in France. October 2009. Designed by: Studios Menthe&Chocolat. Photo credits: All rights reserved Total. M. Roussel, Th. Gonzalez, L. Zylberman, M. Dufour, F. Sejourne, Leren Eiliv, Statoil/Total, L. Sauser, L. Stephane, S. Rivoallon, T.Haga, A.Picard, M.Richards, S.Williams, P.Dugas, Total/Camel, STMFC/Altivue, Getty Images (A.Baxter), D.R., X - By courtesy of: SHI, Cheniere. Illustration : Nando.

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