Energy trader Gunvor Group Ltd. is on track to exceed last year’s LNG delivery volumes and is already leading rivals in short-term ship charters for the super-chilled fuel, reports Bloomberg.
Exceeded the number on report
Gunvor has conducted at least 35 charters to carry LNG so far this year, according to research by Fearnleys, which looked at fixtures of less than three years.
That’s more than all competitors including major LNG players Qatargas, Cheniere Energy Inc. and Royal Dutch Shell Plc, as well as trading houses Vitol Group and Trafigura Group Ltd.
“We have actually, so far, exceeded the number that Fearnleys has in the report,” said Seth Pietras, a Gunvor spokesman in Geneva, without being more specific.
Set to exceed last year’s record
While most LNG is still traded under long-term contracts, the share of so-called spot deals, or those less than 90 days, and short-term transactions is rising with the expansion of flexible supply from the U.S. and as buyers seek shorter, less rigid deals.
Gunvor is also set to exceed last year’s record deliveries. In 2018, it boosted its LNG volume by 60% to about 11 million metric tons, topping larger rivals Vitol and Trafigura.
“We’re on track to significantly increase that volume this year,” Pietras said.
Long-term supply contracts
The biggest energy trading houses have been rapidly expanding their LNG operations in the past five years, chartering vessels, investing in regasification infrastructure and signing long-term supply contracts with end users that can last for more than a decade.
GasLog’s vessel charter deal
GasLog Ltd., which signed two vessel charters with Gunvor, said the trader’s growth has come despite market headwinds. It can also be attributed to Gunvor’s “ability to structure cargo opportunities where others cannot,” a spokesman for the shipowner said.
Traders around the world have this year been hit by declining LNG prices and a narrowing price differential between Pacific and Atlantic regions, a key way for them to make money.
Spot fixtures
Gunvor concluded 25 spot to multi-voyage fixtures in 2018. It currently has 12 vessels that keep natural gas cooled to about minus 160 degrees Celsius (minus 256 Fahrenheit) under its control, Pietras said.
The Fearnleys report shows that the vast majority of the Gunvor LNG charters this year have been spot fixtures.
LNG delivery volumes to increase
Pietras said that while more than 60% of Gunvor’s LNG volumes delivered in 2018 were under mid- to long-term contracts, that percentage will also increase as the trading house expands the number of LNG vessels it has under long-term charter.
Gunvor earlier this year named Singapore-based Kalpesh Patel and Ksenia Alleyne in Geneva as global co-heads of LNG.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Bloomberg
