Trafigura renews Kochi LNG re-loading contract

Vol 20, PW 15 (20 Apr 17) Midstream & Downstream

Dutch-owned commodities trader Trafigura has renewed its annual contract for storage and reloading at Petronet-LNG's Kochi LNG terminal, and has also landed a storage cargo imported from Angola.

PETROWATCH learns Trafigura, which did not bring in a single storage cargo at Kochi in 2016, nevertheless renewed its storage contract on April 1 as the terminal is strategically located to cater to Asian markets. On April 17 at 10.21am Trafigura landed a 145,860-cubic metre (65,637 tonne) Angolan cargo aboard Bahamas-flagged LNG tanker Sonangol Benguela which was loaded at the Soyo LNG liquefaction facility on March 31, and made its first trip to India.

"Angola LNG auctioned five spots in March," says an LNG industry source. "The cargo bought by Trafigura was the fifth auctioned." Trafigura's game-plan is to store the cargo, for which it is believed to have paid $5.60/mmbtu, until spot prices rise beyond the $6/mmbtu mark when it will become profitable to sell to an eager buyer.

Trafigura signed a similar deal for storage and reloading services with Singapore LNG in June 2015. It brought in its last storage cargo at Kochi on September 18, 2015, later sold at a higher price to Egypt.

Besides flexibility, storage options like this give a trader greater security, as it knows it will have a cargo ready once it finds a buyer.