By Nicholas Earl
Germany has secured a long-term gas deal with commodities specialist Trafigura to shore up its energy supplies over the coming winters.
The four-year £2.48bn ($3bn) loan arrangement has been jointly underwritten by Trafigura, Deutsche Bank and another undisclosed bank, with the support of over 25 banks participating through syndication.
Richard Holtum, head of gas and power trading for Trafigura said: “We are proud to be contributing to Europe’s energy security by supplying this significant volume of gas to Germany backed by our extensive portfolio and long term US liquefied natural gas contracts,”
The loan will support a new commitment by Trafigura to deliver substantial volumes of gas into the European gas grid, and ultimately into Germany, over the next four years.
Trafigura will supply the gas to Securing Energy for Europe (SEFE), which was recently recapitalised by the German government.
The first gas delivery took place on at the start of last month, and Trafigura will use existing quantities from its global gas and liquefied natural gas (LNG) portfolio to help secure gas supplies to SEFE.
The deal also included a review of Trafigura’s environmental, social and governance (ESG) policies and performance.
Germany is scrambling to boost its supplies through long-term agreements for gas and LNG from overseas vendors – and has managed to top up its storage to 97 per cent of capacity.
This comes as European Union countries managed to cut gas demand by a quarter in November despite declining temperatures.
Data from commodity analytics company ICIS – shared with The Financial Times – revealed gas demand in the EU was 24 per cent below the five-year average last month, following a similar fall in October.
EU nations have been trying to cut their dependence on Russian fossil fuels by finding alternative sources or making changes to curb demand.
Prior to Russia’s invasion of Ukraine, the bloc relied on Russia for around 40 per cent of its gas and a third of it oil needs.
The bloc is looking to establish a price cap on Russian gas supplies, having finally agreed with the G7 to contain Russian oil prices to $60 per barrel, to slash the Kremlin’s war revenues.
The EU has spent €123bn on Russian oil, gas and coal since the invasion of Ukraine, according to research from Beyond Coal.
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