Trafigura seals long-term LNG deal with Canada’s largest natural gas producer
Trafigura seals long-term LNG deal with Canada's largest natural gas producer - Offshore Energy
Trafigura seals long-term LNG deal with Canada’s largest natural gas producer
Commodities trading group Trafigura has inked a long-term LNG agreement with Canada’s largest natural gas producer Tourmaline, marking the first time the two parties have signed such an agreement.
Tourmaline said it increased its exposure to JKM by entering into a netback agreement with Trafigura based on 62,500 mmbtu/d (~0.5 mpta) of LNG for a seven-year term starting in January 2027, with an option for extension up to December 2039.
In addition, the company stated it expanded its international exposure to include a physical netback agreement with Trafigura Canada Limited which will receive Dutch TTF index pricing. Starting in March 2024, Tourmaline will deliver 50,000 mmbtu/d of natural gas at AB-NIT and receive a Dutch TTF index price (less associated deductions) until December 2026.
Mike Rose, President and CEO of Tourmaline commented: “We are excited about our recent transaction with Trafigura and the opportunity to expand our exposure to international LNG markets.”
Richard Holtum, Global Head of Gas, Power and Renewables for Trafigura added: “We’re delighted to build on our relationship with Tourmaline at a time when Canadian gas producers are starting to play a pivotal role in global LNG markets. Today’s agreements support our commitment to these markets and to the growth of our long-term portfolios, while demonstrating our ability to provide innovative, tailor-made solutions and ensuring security of supply for our customers worldwide.”
Last year, Trafigura entered into two revolving credit facilities for a total combined amount of $400 million, with insurance from the Export-Import Bank of the United States (US EXIM), to supply European customers with LNG.
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.