Home > Chemical News

Chemical News

Gunvor sets sights on expanding LNG presence in Europe, Asia

https://www.chemnet.com   Aug 09,2010
Geneva-based trading company Gunvor has purchased about 20 spot LNG cargoes, which it plans to deliver primarily into northwest Europe starting this winter, according to its head of LNG.


"The aim is to link our LNG activities in the Atlantic Basin with our European gas and power positions in order to create an integrated, physical portfolio across the continent," LNG head Stephane Caudron told Platts in an interview Friday.


Gunvor looks set to expand its presence in European LNG on the back of its already fast-paced growth program, by potentially doubling the number of
regasification terminals at which it has capacity to four by the end of the
year.


France's Montoir LNG terminal is one of the two terminals at which Gunvor is already active. It didn't disclose the name of the other.


"We are establishing a solid basis for growing the LNG business in Europe and throughout the Atlantic Basin," Caudron told Platts.


He added that Gunvor has slots for each of its first 20 LNG cargoes.


Traders said the company purchased 14 of the cargoes from Spain's Repsol, with the remaining six sourced from the Atlantic region.


Gunvor declined to comment on this.


"We continue to pursue further cargoes in addition to these initial purchases," Caudron said.


ASIAN PLANS


Caudron also outlined plans to supply LNG to certain Asian markets, saying Gunvor had a number of projects in the pipeline that it is unable to discuss.


Unlike its European growth plans, which are based largely around spot LNG purchases, Gunvor sees "more structured opportunities in Asia," claiming it
will mobilize existing infrastructure and relationships already established
out of its Singapore offices "to build our LNG presence in the Pacific Basin."



On Friday Gunvor said it had obtained a comprehensive finance facility from Rabobank to enhance its LNG and natural gas trading business.


The size of the finance facility was not disclosed.


In the space of six months, newcomer Gunvor has taken broad stakes in French, Dutch and German hubs, as well as building up a range of trading instruments, including rapid take-up of strategically important terminal slots and storage capacity at auction.


Storage rights give Gunvor the chance to optimize LNG sales into the highest-priced point on the forward curve.


"We are using the full range of instruments at our disposal to increase our presence," Caudron said, referring to Gunvor's rapid take-up of storage capacity in France, Germany, Austria and Slovakia as a means of squeezing more
value from its LNG volumes.


A capacity release program at Montoir LNG by GDF Suez earlier this year gave Gunvor access to slots, sources said.


Elengy, GDF Suez's terminal operating subsidiary, released 1 billion cubic meters/year of capacity to third parties from October 2011 to December 2021 at Montoir LNG.


At Fos Tonkin, LNG capacity is fully booked until the end of 2011, "except for very few slots in 2010," Elengy told Platts.


Elengy refused to provide specific details.


A trader said GDF gave away one slot per month over 15 years at Fos.


FRENCH GAS MARKET


The French Montoir terminal looks set to receive the bulk of shipments,Caudron said.


The associated flow of LNG volumes into France's gas transmission system will aid liquidity at the French PEG Nord gas hub, as well as other European hubs where Gunvor has interconnected positions. However, the bulk of these volumes have already been placed in the market, a market source said.


"Our aim with physical LNG is partly to contribute to increasing liquidity at France's Peg, the Dutch TTF, Germany's NetConnect and other European hubs," Caudron said.


"Continental European markets fit well with our portfolio of storage and power trading positions," he added.


A French pipeline trader said Gunvor and Gas Natural, as recent recipients of capacity at Montoir, have geared toward LNG deliveries starting from October 2010 after establishing bilateral trading agreements, setting up credit lines and clearing regulatory hurdles for over-the-counter trade earlier this year.


"If you want to invest in PEG then coming in with LNG is a good way to do that," the trader said.
 Print  |    add to Favorites  |    Close