Natural gas/LNG house of the year: ENGIE

ENGIE continues to expand its services to better serve firms in Asia-Pacific (Apac) dealing with the challenges of energy risk management and supply

Volatility caused by the Ukrainian crisis was a case in point. The disruption prompted uncertainties in clients’ portfolio risk management, leading them to rethink their approach when managing embedded optionality in the long-term contract and spot market volatility, according to Ameko Zhang, head of Apac gas trading at ENGIE.

To help clients materialise optionality value, the firm expanded its product offering with new Japan Korea Marker (JKM) options under the Singapore gas trading desk, allowing ENGIE to enhance client contract optimisation.

“As a market-making provider, ENGIE serves a wide range of clients globally. This new product is indeed a ‘next level’ to enhance our trading coverage and portfolio synergy between the east and west flows,” Zhang says.

ENGIE hired an experienced options trader from Europe to market this new product and support the initiative.

In the past year ENGIE launched a yuan-settled physical liquefied natural gas (LNG) trade to the China National Offshore Oil Corporation, which was executed on the Shanghai Petroleum and Natural Gas Exchange.

The firm also completed a JKM option deal with an industrial client in the region: “An innovative, bespoke structure helping our customer to optimise its energy purchase costs by buying capped swaps to increase its competitiveness and aligning to physical contracts”, says Vikas Shenoy, executive director, origination. In addition, ENGIE completed a structured co-operation deal with a prominent Asian player, which included the purchase and sale of LNG and shipping joint optimisation. ENGIE also won a competitive tender for up to 15-year LNG deliveries to a state-owned Asian buyer.

The firm is committed to achieving its net-zero carbon goal by 2045 and supporting its clients on their decarbonisation journeys. Ralf Dickgreber, head of global LNG and biomass, highlights the firm’s ‘integrated approach’, which aims to cover the whole gas value chain from upstream to downstream.

Given the firm’s experience as a consumer and midstreamer, Dickgreber says ENGIE has the expertise and tools to help customers in the energy transition. The firm has worked hard to phase out coal from its ecosystem – assisting in converting coal-fired stations into biomass power plants and using LNG as a transition fuel.

ENGIE is also pushing industry peers and producers to apply the highest standards when reducing their carbon footprints, including considering other environmental and social aspects.

“In biomass, everything has to be certified. But the gas industry is not there yet. The question needs to be asked: ‘Why can’t we have some more stringent certification?’ That’s an area where we spend a lot of time,” Dickgreber says.

Looking ahead, ENGIE will focus on providing more structured solutions to clients, expanding its regional reach and continuing its focus on energy transition.

With upstream and downstream gas native positions, trading activity, product range and proxy hedging strategies, the firm connects and matches the position of its assets with clients’ portfolios worldwide.

“ENGIE will continue to develop its presence in key Apac markets and deepen its regional capabilities in physical and financial energy supply chains, expanding into India and the Middle East,” says Varun Gujral, chief executive Apac of ENGIE Global Energy Management & Sales (GEMS).

“ENGIE’s ambition is to create a carbon-neutral economy, and it is doing that by committing itself to low-carbon molecules as well as green electrons, helping clients and markets toward energy transition.”