By ANNA SHIRYAEVSKAYA
Koch Supply & Trading, a unit of Koch Industries, will
start buying and selling European electricity and expand its
liquefied natural gas (LNG) business to take advantage of a
globalizing market for the fuel.
The trading unit of the second-largest closely held US
company by revenue is hiring one or two power traders in
Geneva and plans to be ready for trading next year, Stephen
Cornish, director of Koch Supply & Trading, said in a
telephone interview from London. The company will expand into
Turkey and the Caspian region in 2015 and open an office in
Tokyo for its LNG business this year, he said.
Koch is expanding in power as companies from Bank of America
Corp. to Cargill Inc. pull out of the market as prices trade
near a nine-year low after the euro regions longest
recession cut demand. As many as 120 Europe
an power and gas traders
lost or changed their jobs last year in the biggest shakeout
of the industry since the collapse of Enron Corp. more than a
We dont build our business based on whether the
markets are up or down, Cornish said. There are a
lot of counterparts out there that are re-evaluating their
business models and are looking for high quality counterparts
to do deals with. In that scenario we think we can add
Koch is looking to expand into mainland Europe
an power markets from
Geneva, its base for gas trading and origination in Europe,
the Middle East and Africa, after a separate London- based
business focused on the UK. exited the market in 2011, said
Deanna Altenhoff, a spokeswoman for Koch. Koch Energy Europe
traded natural gas, power and emission credits, according to
a company statement in 2010.
Koch started trading crude oil in 1969 and added global gas
and LNG to its portfolio in 2012, according to the
companys website. As part of a large industrial
conglomerate, which itself is a gas consumer, Koch benefits
from dealing with industrials, which want to talk to
like-minded companies, Cornish said.
When it comes to power, we believe there should be an
opportunity for us there too, Cornish said by telephone
from London on June 13. We are getting requests to get
involved in that market to map over the success that we have
had in Europe
an natural gas.
Koch Supply & Trading plans to enter Turkey and the
Caspian region next year, he said. In addition to Geneva, the
company has an Amsterdam office for its gas sourcing needs
and a presence in Dusseldorf, Germany, for some of its
marketing activity, he said.
The companys LNG business is based in London with
trading and origination operations in Singapore and Houston
and satellite offices in Rio de Janeiro and Dubai. The
company may expand further in the Far East and in South
America, if opportunities arise, he said.
Renewables, shale gas, the 2008 economic crisis and the
Fukushima nuclear disaster in Japan have all impacted the
market, Cornish said. While the global LNG market will remain
tight through next year, trade will start to increase in 2016
as Australian project
s now under construction
start producing the
super-chilled fuel and US exports begin, the International
Energy Agency said in its medium-term natural gas market
outlook on June 10.
Koch has done LNG deals in both the Atlantic and Pacific
regions, according to Cornish.
We have a natural need to be in the market, he
said. If you are a natural market participant with a
global reach, a great balance sheet, and lots of physical
activity, you have a significant role to play.