Trafigura says closes $400 million credit to sell US LNG, mainly in Europe

Trafigura has signed a deal for two revolving credit facilities totaling $400 million with the Export-Import Bank of the United States, the commodity trader has said.

The funds will exclusively be used to purchase US LNG cargoes, primarily to supply to European buyers, providing an alternative source of natural gas following Russia's invasion of Ukraine, Trafigura said in an Oct. 4 statement.

The bank, known as US EXIM, had approved the credits earlier this year.

These are the first LNG-based facilities that the US EXIM's FIBC insurance policy backs, according to Singapore-based Trafigura. These facilities can only be extended to a foreign entity by a financial institution to import goods manufactured or produced in the US, the bank says on its website.

Trafigura did not provide information on the expected date on which it will start purchasing the cargoes or whether there are any applicable restrictions for using the funds. Trafigura did not immediately respond to a request for comment.

Trafigura signed a similar credit facility with the Saudi Exim Bank at the end of September to trade non-oil commodities produced in Saudi Arabia.

The company has interests in US LNG exports. It has a 15-year offtake agreement with Cheniere for 1 million mt/year of LNG, which became effective in 2019.

S&P Global Commodity Insights assessed the FOB Gulf Coast Marker at $8.88/MMBtu Oct. 5, down 53 cents on the day. This price assessment reflects the daily export value of LNG traded free-on-board from the US Gulf Coast.

The Platts DES Northwest Europe Marker for November was assessed at $10.503/MMBtu, or a 65-cents/MMBtu discount to the November TTF hub price, down 62.6 cents/MMBtu on Oct. 5. This marks the lowest NWE has been since Sept. 8, when Platts assessed the market at $10.034/MMBtu.

Platts is part of S&P Global.