Added Value for Energy Projects

Independent Supply of Liquefied Natural Gas (LNG)

Large investments in the building of gas liquefaction plants and liquefied natural gas receiving terminals in recent years have created a genuine global market place for LNG. As the importance of LNG in the commodities market will continue to increase in the future, accessing reliable market intelligence is, and will be, crucial for market participants. The LNG sector is a relatively recent, and logical, progression for our gas alliance. This is a market which has gained increasing significance in recent years. Around 85% of LNG is sold on long-term contracts. WALTER SOLUTIONS has been more active as a broker in the remaining 15% of the market, using our core energy trading skills to bring opportunities to the sector.

Our desk's primary objective is to facilitate the global transaction of LNG through improving market transparency. We are identifying trading opportunities and structure spot deals based on the Global LNG Markets Methodology and LNG Spot Price Assessments. Since its inception the desk has successfully transacted cargoes into both Europe and the Far East. We also work with our client base on transactions involving the marketing of re-gas capacity, entry strategy and portfolio optimization.

By taking LNG from areas of surplus, we are actively contributing to the growth in the market. For our customers, the independence of our GLOBAL ENERGY DIVISION is important in this area. LNG is natural gas that has been converted to liquid form for ease of storage or transport. The liquefaction process involves removal of certain components (such as dust, helium, or impurities that could cause difficulty downstream, e.g. water, and heavy hydrocarbons) and then condensed into a liquid at close to atmospheric pressure (maximum transport pressure set around 25 kPa (3.6 psi) by cooling it to approximately -163 degrees Celsius.

LNG is transported in specially designed cryogenic seagoing vessels or cryogenic road tankers by our clients - and stored in specially designed tanks. LNG is about 1/614th the volume of natural gas at standard temperature and pressure (STP), making it much more cost-efficient to transport over long distances where pipelines do not exist. Where moving natural gas by pipelines is not possible or economical, it can be transported by LNG vessels. The most common types of tanks are membrane (prismatic), Moss Rosenberg (spheres) or self-supporting prismatic type.

LNG can be shipped around the world in specially constructed seagoing vessels by our charter partners. The trade of LNG is completed by signing a sale and purchase agreement (SPA) between one of our suppliers and a receiving terminal, and by signing a gas sale agreement (GSA) between a receiving terminal and end-users. Most of the contract terms used to be DES or Ex Ship where the seller was responsible for the transportation. But with low shipbuilding costs, and buyers preferring to ensure reliable and stable supply, there are more and more contract terms of FOB under which the buyer is responsible for transport.

This is mastered by the buyer either owning the vessel or signing a long-term charter agreement with independent carriers. Older agreements for LNG trade used to be long-term portfolios that were relatively inflexible both in price and volume. If the annual contract quantity is confirmed, our procured buyers are obliged to take and pay for the product, or pay for it even if not taken, which is called the obligation of take or pay (TOP). Our LNG experts have long-term experience in the industry and provide full-service for the fulfillment of both sales and purchase projects. That covers negotiation with suppliers, traders and and buyers as well as preparation of contracts and logistics. In case a client wants to improve his market access he can use us as a back-to-back trading house with a specialized fulfillment team.