Trafigura ensures the loan to supply natural gas to Sefe, which is the quasi-nationalized entity that was formerly Gazprom Germania
Trafigura Group, the commodities trading house secures a $3 billion loan facility partly backed by the German government to help in supplying natural gas as Berlin increases the efforts to secure the natural resources following Russia’s invasion of Ukraine. Trafigura ensures the loan to supply natural gas to Sefe, which is the quasi-nationalized entity that was formerly Gazprom Germania.
The commodities trading house will principally tap its liquefied natural gas and global gas portfolio which made the first delivery on Nov. 1, according to the company’s statement released on Monday. The loan facility would last for four years and was led by Deutsche bank and syndicated among more than 25 other banks. This would make Trafigura’s second deal in recent months following its announcement in the month of October on securing an $800 million loan to supply metals to Germany.
The majority of trading companies that used to be off-takers of Russian energy, metals, and grains are now utilized by the government to find substitutes from international markets. The current deal, however, by the trading
house could be seen as a move to aid the government to secure commodities. Germany had to revise its energy policy since the ongoing war between Russia and Ukraine forced the country to end a long-lasting reliance on cheap Russian gas. Germany used to receive more than half of its natural gas requirements fulfilled by Russia.
Officials have had discussions with Qatar and Saudi Arabia seeking energy deals and Qatar recently announced a long-term agreement to supply Germany with natural gas starting in 2026. Trafigura will supply Sefe, which rebranded as Securing Energy For Europe after being essentially nationalized by Germany, with natural gas largely from existing supplies, trading pipeline gas and utilizing its global portfolio of LNG supply deals. Germany also has a lack of other critical materials like metals that is essential to technologies required for the transition away from fossil fuels.
The government as of now thinking of having a state-backed fund that would help them to find alternative suppliers to China. The government’s United Financial Loan program helps to secure strategic commodities for the German Export credit agency’s scheme and the present loan is supported by the United Financial Loan program.
The scheme became more important following the Russia-Ukraine war, causing Germany to struggle to replace natural gas suppliers after Gazprom reduced exports to the European Union. “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,” the company said. The first delivery under the new loan had already taken place on November 1.
The loan means the commodities trading house has committed to delivering “substantial volumes of gas into the European gas grid, and ultimately into Germany, over the next four years,” read the company statement. Germany was unique among Europe’s major economies in never having built an LNG import terminal before Russia’s invasion of Ukraine, choosing instead to rely solely on gas shipped by pipeline, predominantly from Norway and Russia. Germany has already established one terminal that will be supplied by a regasification unit tanker and floating storage, with three more anticipated to follow in the coming months.