Global commodities trader Trafigura Group Pte. Ltd. has secured a $3 billion loan backed by the German government to help secure more natural gas for the country. 

Europe LNG Capacity

Trafigura would supply the gas to Germany’s Securing Energy for Europe (Sefe), a former Gazprom PJSC unit that the country nationalized and recapitalized earlier this year. The first gas delivery under the arrangement took place Nov. 1. Trafigura said it would primarily use existing quantities from its global gas and LNG portfolio to supply Sefe. 

Trafigura’s Richard Holtum, head of gas and power trading, added that liquefied natural gas would largely be sourced from the trading house’s long-term U.S. contracts. 

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The four-year loan was underwritten by Deutsche Bank and another unnamed international bank. More than 25 banks participated in the syndication, which Trafigura said was 1.6 times oversubscribed. 

Germany has scrambled to secure additional natural gas supplies this year since Russia has significantly cut deliveries to Europe. The country historically imported more than 90% of its gas via pipeline since it lacks LNG import capacity, which is now being developed rapidly and is expected to start coming online by the end of the year. Six floating storage and regasification units are expected to enter service for the country by the end of 2023.

But Germany, along with other countries and utilities across Europe, has been reluctant to sign the typical 20-year deals that LNG producers want to underpin investments in their facilities given longer-term environmental goals. That’s opened the door for energy majors and trading houses to bring additional volumes into the continent. 

ConocoPhillips said last week that it signed two contracts to buy LNG from QatarEnergy and deliver it to Germany beginning in 2026. 

In October, Trafigura secured another $800 million loan to supply metals to Germany as the country is working to shore up other resources after its break with Russia following the Kremlin’s decision to invade Ukraine in February. 

The trading house said its latest agreement for gas supplies also included a review of its environmental, social and governance policies and performance.