Dong Expands LNG Trading Unit in London as Global Volumes Riseby and
Two LNG hires in London office will be made this year
Dutch Gate terminal seen as basis for increasing LNG activity
Dong Energy A/S is expanding its liquefied natural gas trading business to profit from more global supply heading to Europe.
The Danish state-controlled utility is hiring two traders for its London office, bringing its LNG team there to as many as four, Karsten Plauborg, head of LNG at Dong, said in an interview. Manuel Marcomini will join as a senior trader in June from Econgas GmbH in Vienna.
“We are manning our London office, partly due to replacements and partly for the expected increase we foresee in LNG trading activity,” Plauborg said by phone. Dong also trades LNG out of Copenhagen.
Dong estimates that global LNG production will expand by 146 million metric tons a year through 2020, which is about half of how much existing plants produce. Utilities such as Germany’s RWE AG and trading houses from Gunvor Group to Glencore Plc have been opening or expanding LNG desks over over past four years in anticipation of a surge in supply from Australia and the U.S.
Dong, which started trading the super-chilled fuel in November 2013, will have a total of nine people involved in its LNG business, Plauborg said.
The utility holds capacity at the Gate LNG terminal in the Netherlands, one of the five import facilities in northwest Europe with access to liquid trading hubs such as the National Balancing Point in the U.K. and the Dutch Title Transfer Facility. TTF and NBP are Europe’s biggest gas hubs by volume, according to Trayport Ltd., an information services provider.
“The Gate terminal, along with the terminals in the U.K. and Belgium, are the most attractive in the European sphere, and we see Gate as the basis for increasing our trading activity,” Plauborg said.
Europe accounts for about 20 percent of global LNG import capacity, according to the International Gas Union. More than half of the U.S. LNG supply will go to Europe by 2020, according to Wood Mackenzie Ltd.
Dong also plans to participate in the U.S. LNG market in short- and long-term volumes and has done trades in South America. London will still be the center of its trading activity, said Plauborg.
“You get access to so many other counterparties,” he said. “We believe that even an Asian trade can be carried out of London, perhaps not with the same level of networking, but working out of London is still quite efficient.”