Eni says to expand Singapore LNG desk to market Mozambique supplies

SINGAPORE (Reuters) — Eni plans to expand its Singapore trading desk to market LNG supplies from new projects such as Mozambique to buyers in Asia, senior executives from the Italian oil and gas company’s trading arm said.

The expansion comes after Eni decided earlier this year to integrate its LNG, gas business with its upstream unit so that it can act as the marketing arm for new projects that are coming online onstream in the next years, Franco Magnani, chief executive officer of Eni Trading and Shipping told Reuters.

“What we want to do is to build a (LNG) portfolio as a company and this will require a much stronger presence in Asia than in the past in trading,” Magnani said on the sidelines of the APPEC conference.

“We’ll hire as the portfolio develops,” he said, adding that the Singapore office currently has two LNG traders.

In Asia, the company exports LNG from its Jangkrik field in Indonesia through the Bontang terminal. In Africa, exports from the $8 B project at the Coral South gas field off the coast of Mozambique could start in 2022. The project will produce 3.4 MMtpy of LNG.

Eni could also export LNG from Egypt at a later stage, Magnani said.

The giant offshore Zohr gas field in Egypt, with an estimated 30 Tcf of gas, is due to start production in December.

Asian spot LNG prices LNG-AS have spiked to about $7/MMBtu driven by new demand from China and South Asia despite expectations of a supply glut as projects in Australia and the United States come online.

Eni said in May it had clinched a 15-yr deal to supply 11 MMtpy of LNG to state-run import Pakistan LNG.

Eni is the largest international oil company in Africa, producing close to 1 MMbpd of oil equivalent.

The company recently started production of Sankofa crude in Ghana. The field is expected to reach peak production of 45,000 barrels per day by year-end and two cargoes have been exported to Europe, according to Eni.

The medium, low-sulfur crude will eventually head to China where Eni is working on expanding its customers base beyond state companies to independent refiners, Magnani said.

“The opportunity is there because they have the need and we have the qualities that they’re looking for,” said Jorge Montepeque, a senior vice president for origination at Eni.

Still, challenges in logistics and financing will need to be worked out before Eni is able to supply oil directly to independent refiners, the executives said.

Reporting by Florence Tan; Editing by Christian Schmollinger

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