LNG

The Philippines is gradually increasing its activities in the liquefied natural gas trading and tender market with the Singapore-based unit of commodities firm Trafigura winning the latest Filipino cargo tender.

Gunvor Group, the Swiss-based global commodities firm and liquefied natural gas trader, has expanded its shipping fleet by chartering four modern LNG carriers being constructed in China for Celsius Tankers.

Tellurian Inc., the US developer of the Driftwood LNG export project at Lake Charles in Louisiana, has signed its first landmark LNG supply deal with international commodities company Gunvor to give the joint venture momentum.

Gunvor trades in energy from its main offices in cities such as Geneva in Switzerland, Singapore, the Chinese city of Shanghai and Houston in Texas and its agreement with Tellurian was signed by Gunvor Singapore Pte Ltd.

Tellurian's transaction with Gunvor is a sales and purchase agreement (SPA) for 3 million tonnes per annum of cargoes for a period of 10 years,

“The volumes will be indexed to a combination of two indices, the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), netted back for transportation charges,” said Tellurian.

The LNG would be delivered on free-on-board (FOB) basis from the Driftwood facility, the project on the Gulf Coast with proposed total output of 27.6 MTPA.

The Gunvor’s global commodities business already involves almost 18 MTPA of traded LNG cargoes.

“Tellurian intends to market up to 10 MTPA of LNG in our first phase on a JKM, TTF or blended price basis, as our integrated model provides the flexibility to offer this valuable product,” explained Tellurian President and Chief Executive Octávio Simões.

“We welcome Gunvor, the largest independent global trader of LNG volumes, to Driftwood and look forward to providing a cleaner fuel to meet growing global energy needs,” stated Simões.

Tellurian had hinted in its first-quarter earnings report at the start of May 2021 that the improving market favoured the signing soon of supply agreements.

The Houston, Texas-based company said it continued to build its Gulf Coast natural gas business and had concentrated on paying down debt.

The overall project plan for Tellurian now is for the Driftwood liquefaction plant to have first-phase production of 16 MTPA, rising to over 27 MPTA with expansions.

Tellurian produced 3.3 billion cubic feet of natural gas for the quarter in the Haynesville shale basin in north Louisiana.

Tellurian’s upstream assets include 9,704 net acres and interests in 72 producing wells.

The company ended the first quarter with around $58.7M of cash and cash equivalents and generated $8.7M in revenues from natural gas sales.

Tellurian added that it still had a strong balance sheet consisting of around $270.3M in total assets.

Charif Souki, the Executive Chairman of Tellurian, said in a presentation last month that the use of the gas-fired power option was growing in Asia and his company hoped to start finalising commercial agreements based on the current “very strong gas market fundamentals” in Asia and Europe.

International commodities company Gunvor said it would enter an alliance to trade and ship liquefied natural gas to Vietnam, as part of a joint venture with Energy Capital Vietnam (ECV), a US-based development company.

Gunvor Group, the global commodities and energy trader, has released its annual results showing it delivered 16 million tonnes of liquefied natural gas, though overall revenues dropped by more than half because of lower prices.

Gunvor trades in energy from its main offices in cities such as Geneva in Switzerland, Singapore, the Chinese city of Shanghai and Houston in Texas.

The company, which also owns assets such as oil refineries in Rotterdam in the Netherlands and Antwerp in Belgium, reported revenues for 2019 of US$75 billion, a decrease of 54 percent, or US$87Bln, from 2018 when it had income of US$162Bln.

The group’s annual net profits after taxes came to $381M.

“Gunvor’s performance in 2019 was broad-based across all geographies and trading desks, and as a result the company realized strong trading gross profit,” it said.

Total trading volumes increased to 198 million MT from 184 million MT in 2018, mainly due to an increase in the trading of natural gas and LNG.

Gunvor said performance were particularly good at the US trading operations on Houston and Stamford, Connecticut.

“A solid contribution came from the European oil refining network and oil trading activity,” it added.
Gunvor said that “transitional” commodities like natural gas, LNG, liquefied petroleum gas and biofuels comprised 45 percent of total trading activity, an increase from 28 percent in 2018.

It also stated that the corporate overhaul it undertook in 2017 and 2018 to improve risk management and corporate governance enabled the company to effectively take advantage of favourable market conditions throughout the year.

“Gunvor subsequently entered 2020 with a strong balance sheet and liquidity position to meet the unexpected events, and posted a profit for the first quarter,” it explained.

Gunvor said it seamlessly transitioned to work-from-home at all offices across the globe, and trading activities remained unaffected by the Covid-19 pandemic.

“The company has continued to hire and undertake all normal core business operations. Trading performance remains strong across all geographies and desks, including shipping (with more than 100 vessels owned or under long-term charter),” it said.

However, Gunvor noted that the European refining sector was expected to remain challenging for the foreseeable future.

Regardless of the current market environment, Gunvor said it continued to view the long-term challenge for companies in the physical energy commodities trading sector to be effectively positioning themselves within the “energy transition”.

Gunvor acquired two biofuel plants and committed to no longer physically trade coal and activities ceased in 2018.