FACTBOX-New trading players in the LNG market

Tue Dec 7, 2010 4:18pm EST

Dec 7 (Reuters) - The liquefied natural gas (LNG) market is growing rapidly, attracting more players as it evolves into a more competitive, more transparent market that helps connect gas markets across the globe.

The LNG market is set to grow about 50 percent from 2008 to 2013 as projects in various stages of development come online to feed rising demand.

LNG trading has traditionally been dominated by a few large gas-producing incumbents. However, as production increases, the likes of BP (BP.L), Shell (RDSa.L) and BG (BG.L) are being joined by a growing rank of new entrants looking to gain a foothold in the growing market.

LNG is natural gas cooled to liquid for shipping overseas. It is regasified at terminals for transport ashore through pipelines.

NEW LNG TRADING PLAYERS

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Barclays Capital (BARC.L): Barcap, which opened its LNG Services Division in December, is in talks to secure LNG import capacity in the United Kingdom, sources said on Tuesday, as the bank expands into LNG trading. [ID:nN07210702]

This would complement import capacity Barcap has in the United States. In a deal with ENI (ENI.MI) in August, which marked the banks entry into physical LNG cargo trading, Barcap gained import rights at the U.S. Cameron LNG terminal in Louisiana. It will also market gas shipped to the terminal by ENI.

Barclays also markets gas imported to Excelerate Energy's Northeast Gateway terminal in Massachusetts.

Gunvor International: Since entering the LNG market in January this year, the two-man LNG team at Gunvor in Geneva has purchased at least 19 cargoes in the Atlantic, including 14 cargoes from Peru LNG for delivery into Europe this winter.

Gunvor has import capacity in two import terminals in Europe, including the Montoir terminal in France, and is looking to expand further in Northwest Europe. It is also looking to add one more trader to its office in Singapore.

Citigroup (C.N): After buying its first cargo from Trinidad last year, Citi became famous for aggressively bidding for LNG cargoes. Citi has completed a number of deals for re-export from U.S. Gulf Coast, in a clear sign that U.S. demand for imported gas is dwindling. The bank also set up a LNG trading office in Singapore.

Citi has continued to trade LNG despite losing five of its traders to Golar LNG's new trading outfit in May.

Golar LNG GOLAR.OL: Golar launched a new trading subsidiary in May, hiring four former Citi LNG traders. Golar, already established in LNG shipping, set up the new arm to market and trade LNG cargoes and offer services such as risk management to third parties. It has completed at least two deals since it began physical trading.

JP Morgan (JPM.N): The U.S. bank entered the LNG market in March in a deal signed with U.S. terminal operator Cheniere Energy (LNG.A) under which the two parties will jointly look for buying opportunities in the global market.

JP Morgan has import rights for up to 2 billion cubic feet per day of gas at Cheniere's Sabine Pass terminal and also has import capacity at the Montoir terminal in France.

The bank traded 20 physical cargoes this year, its executive director of LNG marketing and trading said last week. [ID:nN01112616]

Mercuria Energy Trading: One of the world's largest independent oil traders, Mercuria said in August it will start trading LNG. It has hired two former BP (BP.L) LNG traders Dan Masters and Andrew Helm. The Geneva-based company cited the growth of the LNG market as one reason for its entry.

BofA Merrill Lynch (BAC.N): While it is unclear how active Merrill Lynch has been in the LNG market this year, sources said that it is on the lookout for import slots in the Isle of Grain terminal in Britain this winter.

Credit Suisse (CSGN.VX): Zurich-based Credit Suisse said it has interest in trading LNG in the future though there are no signs yet of the plans being put into action.

Goldman Sachs (GS.N): After buying a string of cargoes a few years ago, there are rumours that Goldman may also be on the lookout for cargoes going forward. (Compiled by Edward McAllister; Editing by Lisa Shumaker)

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