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ENH taps up Vitol expertise for trading venture

Power is the future for trader Vitol, with oil demand expected to peak within a decade, with gas playing a part to balance renewables.

Vitol and Mozambique’s state-owned Empresa Nacional de Hidrocarbonetos (ENH) have set out plans for a trading-focused joint venture.

The venture will focus on commodities, including LNG. ENH Energy Trading will be 51% owned by ENH and 49% by Vitol. The statement from Vitol on September 17 said ENH’s stake was expected to increase over time.

ENH will acquire trading knowledge through this association with Vitol. The East African country is in the process of becoming an LNG heavyweight. Two plans, the Coral South floating LNG (FLNG) and Mozambique LNG, have been approved. Another project, backed by ExxonMobil, was expected to reach a final investment decision (FID) this year.

The two companies have said they will create an independent marketing and trading team at ENH Energy Trading. It will be based in Singapore.

ENH’s chairman Omar Mithá said the venture would “embark on a path into international commodity trading markets to support our growth … we are confidently expanding our operations overseas, and building a reputable asset for future generations.”

Vitol traded 7.4 million tonnes of LNG in 2017, 7.8mn tonnes in 2018 and expects this number to increase to at least 10mn tonnes in 2019. Vitol has previously signed up as an offtaker from Petronas, the Malaysian company that is participating in the development of the LNG Canada project.

The Eni-operated Coral South FLNG project is due to start in 2022, with production reaching 3.4mn tonnes per year. Anadarko Petroleum took the FID on the 12.88mn tpy Mozambique LNG in June. First LNG is due in 2024. The Rovuma LNG project, which will have 15.2mn tpy of capacity, was due to reach FID in the summer but this appears to have been delayed, with some reports suggesting ExxonMobil was pushing for lower costs.

Vitol has also announced the signing of a 10-year time charter for a newbuild 174,000 cubic metre LNG carrier, with South Korea’s H-Line Shipping. This will be built by Hyundai Samho Heavy Industries (SMHI) and is due for delivery in late 2021.

The trader’s head of LNG, Pablo Galante Escobar, said this would allow Vitol “to optimise our LNG portfolio that includes increasing FOB volumes from different areas that we are actively marketing to our global clients”.

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