September 27, 2018 / 7:04 AM / 3 months ago

Norway's Equinor mulls Asia power trading expansion post-Danske acquisition

* Danske’s trading model can be replicated in Asia

* Oil supply tight, Equinor bullish on demand in 2019

* Moves more condensate to Asia to replace Iran oil

By Florence Tan

SINGAPORE, Sept 27 (Reuters) - Norway’s Equinor ASA could look into trading in power markets in Asia after it completes the acquisition of a Danish power trading company, a senior company official said.

Danske Commodities, one of Denmark’s largest commodity traders, agreed in July to a takeover by Norwegian oil firm Equinor pending regulatory approval.

Danske has “a trading model that can be exported to any market where there is space or room for power trading,” Tor Martin Anfinnsen, Equinor’s senior vice president for marketing and trading told Reuters this week.

There is a “high probability that their competence will also be applied by us in some of the Asian markets,” he said.

“They have just established themselves in Australia but there’s no reason it will not go beyond Australia,” Anfinnsen added, but declined to specify which markets the company has in mind.

Danske Commodities operates in 38 countries but it has recently reduced its trading position on Nasdaq’s Nordic power exchange after one trader’s default left a 114 million euro ($134 million) hole in Nasdaq’s clearing house buffers.

The Danske acquisition comes as Equinor is ramping up investments in renewable energy, especially offshore wind projects. The company plans to spend 15 percent to 20 percent of its capital expenditures on renewables, diversifying its oil and gas portfolio.

Equinor will open a new office in Tokyo later this week and its first office in India by early next year, as it expands its presence in Asia.

“We are changing as a company. Nevertheless, for the foreseeable future, oil and gas will still dominate our agenda,” Anfinnsen said.

Equinor sees a risk to upside for oil prices as supply from Iran, Venezuela, Nigeria and Libya has tightened and the company is quite bullish about economic growth next year despite headwinds from emerging economies and the China-U.S. trade war, its executives said.

“Not many companies are expected to be given waivers, if any, around U.S. sanctions on Iran. There is certainly a bullish upward momentum,” said Simon James, the company’s vice president crude and refining.

Equinor has exported three of its four condensate grades in recent months to Asia as buyers of Iranian condensate sought replacements, James said. These include Snohvit and Ormen Lange from the North Sea, Algerian condensate and U.S. Eagle Ford.

“We wish we have access to more. It looks tight right now,” James said. (Reporting by Florence Tan; Editing by Christian Schmollinger)

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