BY ANNA SHIRYAEVSKAYA and ISIS ALMEIDA
Noble Group is restarting LNG trading from London as the
shale gas boom in the US is set to boost global shipments of
Noble hired Gabriel Gonzalez Laguna and Alejandro Sanchez
Gestido from Bank of America, said Gareth Griffiths, global
head of power and gas trading at Noble Europe. They will
start in the coming months after leaving the banks
Merrill Lynch Commodities unit, Griffiths said, adding that
the precise date is still to be confirmed.
Companies from RWE to Vitol are trading LNG to benefit
from regional price differences as a wave of new supply after
2018 is set to make more cargoes of the super chilled fuel
available. LNG trade will rise by 31% or 100 billion cubic
meters by 2018 from 2012 levels, the International Energy
Agency said in its medium term gas market report in June.
We will be looking to participate in both short-term
and long-term optimizations of physical and financial
arbitrages, Griffiths said. This may include
looking at US shale, Europe
an deliveries and
US gas traded at $4.391/MMBtu on Louisianas Henry Hub.
Northeast Asian LNG for delivery in four to eight weeks cost
$13.50/MMBtu in the week to May 19, according to assessments
by World Gas Intelligence. UK front month gas, a regional
benchmark, was at 44.51 pence a therm ($7.48.MMBtu) on ICE
Sanchez Gestido is returning to Noble after leaving
about a year ago when a decision was made that the
business wasnt ready for this initiative,
Cheniere Energy will start exporting LNG in the first quarter
of 2016, said Jean Abiteboul, president of Cheniere Supply
& Marketing. The Houston-based companys Sabine Pass
terminal is the first to win full approval for US exports
from the Federal Energy Regulatory Commission since
ConocoPhillipss Alaskan Kenai plant in 1967. There were
14 more US export terminals proposed to FERC as of May 21.
Cheniere will charge 115% of Henry Hub prices plus
$3.50/MMBtu in liquefaction fees, and estimates shipping
costs of $1/MMBtu for Europe to $3 for Asia, according to an
April presentation on the companys website.
Griffiths, previously in charge of merchant trading at EON
Global Commodities in Dusseldorf, Germany, joined Noble in
London in October. Nobles Europe
an gas and power team
consists of 40 people in London, Oslo, and Hamburg, he said.
I have been here for eight months and LNG is a natural
and very important part of our strategy, he said at the
annual Flame gas conference in Amsterdam.
Noble, listed in Singapore and based in Hong Kong, was
established in 1987 and now has a market value of $7 billion.
The company is involved in agriculture, including
originating, storing, processing and marketing, and handles
energy products from coal to power as well as metals and
LNG export capacity is set to reach at least 500 billion
cubic meters a year by 2018 as supply arrives from Australia
to the US, according to the IEA, the Paris-based adviser to
Plenty of LNG
The trading market will pick up significantly in two to
three years because there will be plenty of LNG around,
Andree Stracke, head of global gas and LNG at the trading arm
of RWE, Germanys second biggest utility, said in
January. There is so much LNG from the US
Gonzalez Laguna is currently director of LNG trading and
origination, and Sanchez Gestido is director of LNG business
development at Merrill Lynch. The two men will leave the bank
in June, two people familiar with the situation said earlier
this month, asking not to be identified because the move
hadnt been reported. Bank of America remains active in
LNG, a market it entered in 2011, Peter Abdo, a MD at the
bank in London, said May 20.
The LNG market will remain tight until at least 2015,
according to the IEA. Spot and short term LNG trade increased
to 27.4% of the total last year from 25% in 2012, according
to the International Group of Liquefied Natural Gas
Importers, or GIIGNL.
The short term opportunities are interesting but are
relatively few, so the whole process is one of evolution and
we are at the beginning stages, Griffiths said. A
company needs to find its niche in this very complex and
capital intensive sector.