Trafigura secures $3bn mortgage facility to supply Germany with pure fuel

Commodity buying and selling home Trafigura has signed a $3bn mortgage facility partly backstopped by the German authorities to assist provide pure fuel to Sefe, the quasi-nationalised entity that was previously Gazprom Germania.

The $3bn mortgage facility will final for 4 years and was led by Deutsche Financial institution and one other arranger that has requested to not be named, and syndicated amongst greater than 25 different banks, the corporate stated.

The mortgage deal illustrates the most recent transfer by commodity merchants to try to assist Germany safe commodities following Russia’s invasion of Ukraine.

Trafigura will provide Sefe, which rebranded as Securing Vitality For Europe after being successfully nationalised by Germany, with pure fuel largely from present provides, buying and selling pipeline fuel and utilising its world portfolio of LNG provide offers.

The mortgage is backstopped by the German authorities’s Untied Monetary Mortgage programme, which is designed to assist safe strategic commodities for Germany by the Export Credit score Company’s Euler Hermes Aktiengesellschaft scheme.

The scheme has existed for years however has turn into extra distinguished following Russia’s invasion of Ukraine, which left Germany scrambling to exchange pure fuel provides after Gazprom slashed exports to the EU.

“The mortgage will assist a brand new dedication by Trafigura to ship substantial volumes of fuel into the European fuel grid, and finally into Germany, over the subsequent 4 years,” the corporate stated.

Trafigura stated the primary supply beneath the brand new mortgage had already taken place on November 1.

Richard Holtum, head of fuel and energy buying and selling at Trafigura, stated the association would contain the corporate supplying a “important quantity of fuel to Germany backed by our intensive portfolio and long-term US LNG contracts”.

Earlier than Russia’s invasion of Ukraine Germany was distinctive amongst Europe’s main economies in by no means having constructed an LNG import terminal, preferring as an alternative to rely solely on fuel shipped by pipeline, primarily from Russia and Norway.

However the nation has already established one terminal that will probably be provided by a floating storage and regasification unit tanker, with no less than three extra anticipated to comply with within the coming months.

Germany has expressed some hesitation over long-term LNG offers given its commitments to chop emissions, however did signal a 15-year settlement to take provides from Qatar final month.

Analysts stated Germany seemed to be taking a portfolio method, establishing a combination of long-term offers alongside shorter-term preparations with buying and selling homes.

In October Trafigura signed an analogous $800mn deal to assist present Germany with non-Russian metals over the subsequent 5 years.