Registration Document 2005 - Total.com

2
Business overview
Upstream - Gas & Power
In Argentina, TOTAL owns 63.9% of Central Puerto SA and 70%
of Hydroneuquen. Central Puerto SA owns and operates gas-fired
power stations in Buenos Aires and in Neuquén, with a total
capacity of 2,165 MW. Through its stake in Hydroneuquen, TOTAL
owns 41.3% of Piedra del Aguila (HPDA), a 1,400 MW hydroelectric
dam located in the Neuquén region.
In Nigeria, TOTAL and its partner, the state-owned NNPC, are
participating in two projects to construct gas-fired power generation
units. These projects are part of the Nigerian government’s policy to
develop power generation, stop gas flaring and privatize the power
generation sector:
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the Afam power generation unit (restoration of Afam V, 276 MW
capacity; and development of Afam VI, 600-660 MW capacity), in
which TOTAL has a 10% interest through the SPDC joint venture;
and
the Obite power generation unit (TOTAL operator, approximately
400 MW combined cycle), within the EPNL joint venture, in which
TOTAL has a 40% interest.
In the United Kingdom, in September 2005 TOTAL sold its 40%
interest in Humber Power Ltd, which owns a 1,260 MW capacity gasfired
combined cycle power station located on the Humber estuary.
Coal
TOTAL sold approximately 9.5 Mt of coal worldwide in 2005
(compared to 11.3 Mt in 2004 and 11 Mt in 2003). Of this amount,
4.8 Mt was South African steam coal produced by the Group.
Approximately 67% of this coal produced by the Group was sold
to European utility companies and approximately 20% was sold in
Asia. The amount of coal sold by the Group in 2005 was less than
that sold in 2004 due to the fact that, pursuant to modifications
in the partnership agreements with Xstrata, TOTAL no longer
markets Xstrata’s share of production under these agreements
(approximately 2 Mt/y).
The Group’s South African coal is exported through the port of
Richard’s Bay, the largest coal terminal in the world, 5.7% of which
is owned by TOTAL. On the domestic market in South Africa,
sales amounted to 0.6 Mt in 2005, primarily to the industrial and
metallurgic sectors.
TOTAL is also active in coal trading through its wholly-owned
subsidiary Total Energy Resources in Hong Kong and through an
office established in Jakarta in September 2004. Of the 3 Mt of coal
traded in 2005, 70% was sold in Asia.
38 TOTAL - Registration Document 2005
In France, TOTAL, through its subsidiary CDF Énergie, is an
important distributor of steam coal to the industrial sector (paper,
cement, food, residential heating, etc.) with 2005 sales of 2 Mt,
approximately 90% of which is produced by diverse sources
outside the Group.
Renewable Energy
TOTAL is developing its presence in renewable energy as part of its
preparation for future energy needs and as part of its sustainable
development policy. Currently, the two major components of its
activities are solar-photovoltaic energy, where TOTAL has been
present since 1983, and wind power. In 2005, TOTAL also decided
to participate in the development of a third possibility for renewable
energy, wave power.
Solar-photovoltaic power
In solar power, TOTAL has activities that range from the
manufacture of photovoltaic cells (Photovoltec) to the design of
systems (TENESOL) to the financing of rural electrification projects
(Temasol in Morocco and KES in South Africa).
In 2005, Photovoltech, a company specialized in manufacturing
photovoltaic cells, of which TOTAL owned 42.5% before increasing
its interest to 47.8% in January 2006, had sales of 24 M€. Due
to strong demand and the success in marketing the products
provided by Photovoltech, overall production capacity, currently
approximately 13 MWp/y, is planned to be increased to 20 MWp/y
in 2006 and 80 MWp/y in 2008.
In 2005 TOTAL increased its interest in TENESOL (formerly
Total Energy), its partnership with EDF, from 35% to 50%.
TENESOL specializes in the design, manufacture, marketing and
operation of solar-photovoltaic power systems. TENESOL’s sales
increased by about 40% from 2004 to 2005 (and by approximately
110% from 2003 to 2005), amounting to approximately 140 M€
and corresponding to an effective capacity of 30.5 MWp. Its
main commercial markets are for network connections in Europe
(mainly in Germany) and for decentralized rural electrification and
telecommunication systems in the French Overseas Territories.
TENESOL owns a solar panel manufacturing plant in South Africa
with an annual production capacity of 35 MWp. In the second half
of 2005, TENESOL also began production of solar panels at a site
temporarily rented in Toulouse while awaiting the construction of
a plant in Toulouse designed to have an initial annual production
capacity of 15 MWp.