Trafigura to secure US LNG supply for Germany in US$3Bn deal

“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,” said Trafigura head of gas and power trading Richard Holtum.

About 50% of Germany’s natural gas has been supplied by Russia in recent years, and as a result, Germany has enacted emergency energy measures, announcing multiple LNG import terminals, including five based on FSRUs, since the start of Russia’s war against Ukraine.

In April, the German Finance Ministry approved spending €2.94Bn (US$3.09Bn) to fund the FSRUs, with Uniper and RWE signing 10-year charter deals on behalf of the German Government to secure two FSRUs each from Höegh LNG and Dynagas and an additional FSRU coming from US-based Excelerate Energy.

The two Höegh LNG 170,000-m³ FSRUs will be deployed in Germany, one at Wilhelmshaven and another at Brunsbüttel as the country’s first LNG import hubs.

The 5Bn-m³ Höegh LNG FSRU is scheduled to arrive at the turn of the year. However, due to the grid capacities, only about 3.5Bn m³ (about 4% of Germany’s gas requirements) of natural gas per year can then be transported via this pipeline before the construction of a new 55-km pipeline is completed.

Trafigura announced its 2022 annual results showing "strong performance in a highly challenging environment". The commodities trader said it more than doubled profits from the previous year and will return some US$1.7Bn to shareholders and as incentives to top traders. The windfall comes amidst an energy crisis set in motion by Russia’s war against Ukraine. Trafigura said it had "responded to new rules and regulations that came into force across multiple jurisdictions following Russia’s invasion of Ukraine" and had terminated its sole investment in Russia, a 10% minority stake in Vostok Oil. 

"We need to remain focused and vigilant in a period that is likely to be at least as challenging as 2022. Trafigura is well positioned to continue to manage the challenges and supply the vital resources our customers need in the year ahead,” Trafigura CEO Jeremy Weir said.

Sign up for Riviera’s series of technical and operational webinars and conferences in 2023:

• Register to attend by visiting our events page.
• Watch recordings from all of our webinars in the webinar library.