Page 9 - Euroil Week 41 2019

EurOil PIPELINES & TRANSPORT EurOil
Gunvor leads short-term LNG ship charters, overall deliveries
GLOBAL
Trading house Gunvor Group is leading short- term ship charters for LNG, and is anticipated to exceed delivery volumes reached in 2018.
TRADING house Gunvor Group is leading short-term ship charters for LNG, and is antic- ipated to exceed delivery volumes reached in 2018. Overall – not just short-term – shipments are reported to have already surpassed the 2018 total of 176.
According to research by Fearnleys, which looked at fixtures under three years in length, Gun- vor has conducted at least 35 charters to ship LNG so far this year. This puts it ahead of both trading houses and major LNG players such as Cheniere Energy, Qatargas and Royal Dutch Shell.
Indeed, a Gunvor spokesman, Seth Pietras, told Bloomberg last week that the company had actually exceeded this number, but he did not provide further details.
In 2018, Gunvor boosted its LNG deliveries by 60% to about 11mn tonnes, putting it ahead of traders Vitol and Trafigura.
“We’re on track to significantly increase that volume this year,” Pietras said. He added that Gunvor had concluded 25 spot to multi-voyage fixtures in 2018, and currently had 12 vessels that keep natural gas cooled to about minus 160 Celsius.
According to the Fearnleys report, most of the Gunvor short-term charters so far this year have been spot shipments. This comes as spot deals – of less than 90 days – and short-term transac- tions are accounting for a growing share of the LNG trade. Most LNG is still traded under long- term contracts, but buyers are seeking shorter, less rigid deals, spurred in part by the increased
availability of flexible supply from the US.
In response to the surge of LNG supply, the biggest energy trading houses have been rapidly growing their LNG operations in recent years. Moves being made as part of this include charter- ing vessels, investing in regasification infrastruc- ture and signing long-term supply contracts with
end-users that can last for 10 years or more. However, traders have been hit by low LNG prices, under pressure from booming supply and sluggish demand growth. A narrowing price dif- ferential between the Pacific and Atlantic regions has also presented a challenge, as traders tend to
use the differentials to make money.
Pietras noted that over 60% of Gunvor’s LNG
volumes delivered in 2018 were under medium- to long-term contracts. He added that the share of longer-term deals would increase as the trad- ing house expands the number of LNG vessels it has under long-term charter.
Gunvor’s growth can be attributed to its “abil- ity to structure cargo opportunities where others cannot”, a GasLog spokesman told Bloomberg. The shipowner has signed two vessel charters with Gunvor.
Gunvor has reported a gross profit of $800mn for the first three quarters of 2019, thanks in part to the firm’s overhaul that it started last year. This follows a loss of $330mn in 2018. The profit achieved this year so far has allowed Gunvor to cancel plans to sell its Ingolstadt refinery in Germany and stall the sale of a stake in a Russian products terminal. ™
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