Gunvor growing Asia operations, expanding into LPG, naphtha, gasoline, aromatics, power
Global energy trader Gunvor Group is growing its Asia operations to expand in existing markets such as liquefied petroleum gas (LPG), naphtha, gasoline and aromatics as well as into new areas including power, its chairman said.
"In Asia, this is an area where we think has potential going forward," Torbjorn Tornqvist, who is also a co-founder, said on the sidelines of the Asia Pacific Petroleum Conference (APPEC) conference on Monday, referring to power.
Geneva-based Gunvor's main Asian trading hub is in Singapore, where it has 160 people and will focus its regional ambitions for both conventional and renewable power.
Gunvor, which operates an oil refinery and a terminal in Europe and owns two biofuel plants in Spain, remains open to refining investments if the right opportunity arises, Tornqvist said.
Crude oil and natural gas account for just over 60% of Gunvor's trading volume while the bulk of its revenue comes from Europe and the Americas, according to its website.
Gunvor earned about $1.25 B in net profit in 2023, down from the previous year's record of $2.36 B.
"We are leaving an era with huge volatility behind us," he said, adding that industry-wide margins are shrinking. "We don't expect these numbers going forward, we are now back in the normalization of profits."
Tornqvist described India as the bright spot in Asia for oil demand growth, although its consumption is just one-third that of China, where there is scant growth.
"In the rest of Asia, it is a mixed picture," he told a panel discussion earlier on Monday.
The liquefied natural gas (LNG) market is healthier than oil, he said, as softer prices spur demand from South Asia.
"The LNG story is much more positive than many people thought about demand growth in Asia. We start to see prices at $10/MMBtu–$13/MMBtu, you see much more demand come in from price-sensitive countries like Pakistan, Bangladesh, India," he said.
Tornqvist does not expect the spate of new LNG supply after 2025 from new projects in the U.S. and Qatar to collapse prices, as demand will be propped up by countries building gas-fired power plants.
"Growing electricity demand will naturally see gas-fired power plants...And I think we see gas demand growing quite strongly going forward in Asia."
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