Page 7 - GLNG Week 40 2021

GLNG GLOBAL GLNG

Commodity traders reportedly face

margin calls amid gas price spike

PERFORMANCE THE global gas supply crisis looks set to take a – a sector that has rapidly expanded in volumes
further turn for the worse, with the world’s top in recent years and gained greater liquidity, pro-
commodity traders being told by brokers and viding a greater opportunity for traders. Around
exchanges to deposit hundreds of millions of 45% of Gunvor’s hedging positions – totalling
dollars in extra funds to cover their exposure $5.3bn in June – are related to gas and LNG,
to record-high gas prices, Reuters reported on according to Reuters.
October 4. In particular, trading firms have placed their
Citing sources, the news agency said that bets on US LNG. To hedge against price differ-
Glencore, Gunvor, Trafigura and Vitol were ences between physical gas in the US now and
In particular, trading among the traders facing these margin calls on the rest of the world in the future, traders need
firms have placed their their financial positions in natural gas markets. to sell short positions in the European and Asian
bets on US LNG. This will mean the traders will have to tie up gas futures markets. A short position is when a
more of their capital to these deals, and some trader sells a gas futures contract with the inten-
of the smaller firms will have to increase their tion of buying it back later, when it anticipates the
borrowing and have less cash left to trade with, price will be lower.
undermining their profits. However, natural gas prices have gone from
Many of the traders declined to comment on strength to strength in recent months – a time
the report. Gunvor told Reuters that while there of year when markets are typically subdued. In
have been margin calls associated with the Euro- Europe, the November delivery contract at the
pean natural gas price rally, Gunvor maintains Dutch TTF hub surged to a new record on Octo-
“a healthy liquidity position and instruments to ber 5 of $1,300 per 1,000 cubic metres.
manage any further volatility.” At TTF alone, sources told Reuters that trad-
Many of the world’s leading traders have ing houses and other players had together accu-
increased their exposure to LNG in recent years mulated $30bn worth of short positions.™

AFRICA

Senegal’s petroleum minister sees GTA,

Sangomar coming on stream in 2023

PROJECTS & SENEGAL’S Minister of Petroleum and Energy
COMPANIES Aissatou Sophie Gladima has said she still
expects the country to launch commercial
hydrocarbon development at two offshore sites
in 2023.
In an interview with L’Observateur, a local
newspaper, Gladima stated that she remained
optimistic that Woodside Petroleum, the Aus-
tralian operator of the oil-bearing Sangomar
block, and BP, the UK-based operator of the
natural gas-bearing Grande Tortue/Ahemeyim
(GTA) block, would both begin production
in 2023. “We have our fingers crossed,” she
remarked. phase [Sangomar and GTA] are seeing very satis-
She also stressed that these two projects, factory rates of their execution,” she said.
which will mark Senegal’s entry on to the roster The minister made a particular note of pro-
of oil and gas-producing countries, were moving gress at GTA, where BP and its US-based part-
forward. “The two projects in development ner Kosmos Energy will use floating production,

Week 40 08•October•2021 www. NEWSBASE .com P7