Trafigura Boosts LNG Volumes by 22%

Geneva based commodity trading company Trafigura increased its liquefied natural gas (LNG) traded volumes by 22% to 9.9 million mt in its financial year ending September 30 2018, driven by sales to China and South Korea, with the Asian share of our LNG business jumping to 30 percent.

According to the annual report from the multinational commodity trading company, which is legally registered in Singapore,  the big story in the LNG market in 2018 was a surge in demand in Asia. In China, efforts to clean-up the energy mix led to a 45 percent increase in LNG imports year-on-year, while South Korean purchases also rose sharply owing to the country’s low nuclear output as well as a severe winter and hot summer.

Japan also experienced seasonal extremes keeping gas imports strong, despite returning nuclear output and rising renewable generation. Indian imports grew by 19 percent in 2018 as infrastructural expansion unlocked further demand and emerging importers such as Pakistan and Bangladesh continued to demonstrate their growth potential, it said.

Significant new supplies also came on stream from the US, Australia and Russia, but the growth in demand meant that the market was tighter than many had expected. The physical market became more liquid during the year, with real-time price discovery facilitated by the establishment by Platts this year of a physical trading window.

"Trafigura, which has been the world’s leading independent trader of LNG for several years, further built its market position in 2018," it said.
 
The LNG book is now satisfactorily diversified by geography, with an important customer base in Europe, Middle East and the Americas as well as Asia, and is supported by our ample access to infrastructure such as storage tanks and timechartered LNG vessels.

"This enabled us to take full advantage of the global arbitrage opportunities by rapidly switching LNG cargoes from Europe, say, to Asia in response to market signals. We expect demand to continue its upward trajectory over the next year to accommodate the new production coming online," it said.

 Trafigura is well positioned to supply the market, not least by virtue of a series of multi-year offtake agreements signed with LNG producers in 2018. In particular, the first cargo under our 15-year purchase agreement with Cheniere Energy is due to ship in January, marking the start of a contract amounting to one million metric tonnes per annum.