Ørsted to sell LNG business to Swiss natural resources company Glencore

Danish power company Ørsted has agreed to sell its liquefied natural gas business (LNG business), comprising of the long-term regasification capacity agreement with the Gate Terminal and five LNG purchase agreements, to Swiss natural resources company Glencore.

As per the agreement, Glencore will have to replace various contracts with new ones. Ørsted holds the right to use 3bcm of annual regasification capacity at the Gate Terminal, a Dutch LNG regasification terminal in Rotterdam, which began in 2011 will last until 2031.

Ørsted, commenting on the sale of its LNG business, stated: “Even though Ørsted’s LNG team has performed well during the last few years, the business has been loss-making and is projected to remain so for years to come. Further financial improvements would require further contractual commitments.

“With Ørsted’s global expansion in renewable energy, it is clear that LNG trading will not be a part of Ørsted’s future core business, and it is therefore being divested.”

The transaction, which involves a payment from the Danish power company to Glencore, is subject to various conditions. The deal is likely to be closed in the summer of 2020.

Ørsted to sell LNG business to Glencore. Image courtesy of Stuart Miles/Freedigitalphotos.net.