Trafigura to supply US LNG to Germany under new deal

Commodity trader Trafigura said it would supply liquefied natural gas (LNG) from the US to Germany under a new deal revealed on Monday.

The firm said in a statement it had entered into a $3 billion four-year loan to supply gas to German gas trader Sefe, previously known as Gazprom Germania.

According to Trafigura, the loan was jointly arranged and underwritten by Deutsche Bank and another international bank and syndicated to a number of participating banks. Over 25 banks participated in the syndication which was 1.6 times oversubscribed.

The loan is secured, in part, by a guarantee under the Untied Financial Loan program (UFK) of the German government acting through the German Export Credit Agency (ECA) Euler Hermes Aktiengesellschaft.

Trafigura said the program is a tool to secure the long-term delivery of strategic commodities to Germany.

“Substantial volumes”

The loan would support a new commitment by Trafigura to deliver “substantial volumes” of gas into the European gas grid, and ultimately into Germany, over the next four years.

Trafigura said it would supply the gas to SEFE, which was recently recapitalised by the German government.

The commodity firm said that first gas delivery took place on November 1, 2022 and Trafigura would primarily use existing quantities from its global gas and LNG portfolio to help secure gas supplies to Sefe.

Also, the agreement included a review of Trafigura’s environmental, social and governance (ESG) policies and performance, it said.

“We are proud to be contributing to Europe’s energy security by supplying this significant volume of gas to Germany backed by our extensive portfolio and long-term US LNG contracts,” Richard Holtum, head of gas and power trading for Trafigura, said in the statement.

Trafigura is one of the world’s largest independent LNG traders. The firm previously signed offtake deals with US LNG producers Cheniere and Freeport but it also works in the spot market.

German LNG imports

Germany currently has no operational LNG import facilities but the country is working to become a large importer of the fuel as it looks to replace Russian gas pipeline supplies.

The 170,000-cbm FSRU Hoegh Esperanza is heading towards Germany loaded with a cargo from Spain to start serving the Uniper-led Wilhelmshaven facility. This could become the first-ever LNG shipment to Germany.

This facility, RWE’s Elbhafen LNG terminal in Brunsbuettel, and the first private terminal in Lubmin are expected to become the country’s first floating LNG import terminals.

Germany is financing the charters of five FSRUs. These include the two units RWE chartered from Hoegh LNG, the two Dynagas units chartered to Uniper, and Excelerate’s FSRU chartered by Engie, TES, and E.ON.

Besides these government-backed units, Deutsche ReGas is also working on the first private German FSRU-based facility in Lubmin and expects to launch it in December this year.

On top of these FSRU-based facilities, the Gasunie-led planned onshore LNG import terminal in Brunsbuettel, Germany, has also been in the headlines lately.

Earlier this year, Gasunie joined forces with the German government and RWE to build the Brunsbuettel LNG import terminal.

Two LNG supply deals related to this facility were announced last week, including the QatarEnergy and ConocoPhillips agreement as well as the Ineos and Sempra deal.

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