Danish energy company Orsted has offloaded its loss-making LNG business to major Swiss trader Glencore, adding to the volumes controlled by the gas carrier charterer.
The deal gives Glencore's oil division use of use 3bn cbm of annual regasification capacity at the Gate terminal in Rotterdam until 2031, plus five LNG supply contracts.
"The transaction involves a payment from Orsted to Glencore," Glencore said.
Orsted signed the Rotterdam regas deal in December 2007.
Glencore, which controls a fleet of 10 product carriers but no gas ships, charters in LNG carriers on term contracts.
In July, Glencore and Total Gas & Power executed the first LNG freight swap backed by the Baltic Exchange's new LNG index.
Orsted, better known for wind farms, said that even though its LNG team had performed well during the last few years, the business has been loss-making and is projected to remain so for years to come.
Not a core business
"Further financial improvements would require further contractual commitments," it added.
"With Orsted’s global expansion in renewable energy, it is clear that LNG trading will not be a part of Orsted’s future core business, and it is therefore being divested."
Orsted will book a loss that exceeds its current provision related to the LNG activities.
The transaction is expected to complete in the summer of 2020.
