LONDON (Reuters) - Commodity trader Trafigura purchased more liquefied natural gas (LNG) from the United States on Tuesday, this time from the Freeport project in Texas for 1.5 million tonnes (mt) of supply over three years to underpin trade growth.
It builds on Trafigura’s 15-year LNG deal with U.S. producer Cheniere Energy for supply from Sabine Pass as it also develops import infrastructure and diversifies away from being a pure trader.
Freeport LNG Marketing will deliver the first LNG to Trafigura on July 1, 2020 following completion of the 15 mt/year plant’s third production unit on Quintana Island near Freeport, Texas, Trafigura said.
“We view this as the start of a long-term relationship that will be key in growing our future business,” Michael Smith, Chief Executive of Freeport LNG, said.
Hadi Hallouche, Trafigura’s head of Oil Asia, said the deal would further enhance security of supply for its LNG customers.
Under the free-on-board terms, Trafigura retains the flexibility to deliver the cargoes anywhere in the world.
Swiss trade houses grabbed a $10 billion share of the rapidly growing LNG business last year, handling roughly 8.5 percent of all supply.
With LNG trading set to balloon as global liquefaction capacity mounts and attracts new players, reconfiguring and diversifying the market, traders stand to grow their share of the business.
Some are moving beyond trading, seeking stakes in LNG production and leasing capacity in facilities such as floating import terminals, which are cheaper to build and faster to install than those on dry land.
Reporting by Oleg Vukmanovic, editing by Louise Heavens and David Evans