September 17, 2019 / 10:17 AM / a month ago

UPDATE 2-Vitol and Mozambique's state oil firm form trading joint venture

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By Julia Payne

LONDON, Sept 17 (Reuters) - Global energy trader Vitol and Mozambique’s state oil firm ENH have launched a trading joint venture called ENH Energy Trading, Vitol said on Tuesday, to focus on liquefied natural gas (LNG), liquefied petroleum gas and condensate.

The new entity will be incorporated and based in Singapore. ENH will hold a 51% stake, while Vitol will hold the remainder.

The move is part of a wider trend since last year that has seen energy firms either set up new, dedicated gas trading desks or expand existing ones in Singapore. Asia is the fastest growing LNG market, led by Chinese demand.

Singapore has also been expanding its LNG infrastructure by increasing storage capacity.

Mozambique has an estimated 125 trillion cubic feet of technically recoverable gas resources and is expected to become a top LNG exporter with over 30 million tonnes per year, the statement said.

Vitol declined to give projected volumes that the JV will receive.

There are two mega LNG projects being developed in the southern African country.

One, now owned by Total following the takeover of ex-operator Anadarko by Occidental Petroleum, has taken a final investment decision. The other, led by Exxon Mobil Corp , is expected to do so later this year.

ENH has stakes in two development areas. It has a 15% stake in Area 1, Total’s project, and a 10% stake in Area 4 led by Exxon Mobil.

Only Area 4 still has physical LNG cargoes to market. However, it is unclear what ENH will be allocated.

Vitol traded 7.8 million tonnes of LNG last year and 7.4 million barrels per day of crude, making it the largest independent oil trader. (Reporting by Julia Payne, additional reporting by Sabina Zawadzki; Editing by Louise Heavens and Mark Potter)

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