Macquarie Group Ltd. aims to boost its liquefied natural gas business by ramping up physical trading, the latest effort by the bank to capture a larger share of the fast-growing market.
The company is pursuing long-term LNG supply deals of up to 10 to 15 years, according to people with direct knowledge of the matter. The strategy also involves taking positions in shipping and assets, they said, asking not to be identified as the plans have not been made public.
The push underscores a broader shift as financial institutions move to establish themselves in the LNG market, which is dominated by oil majors, commodity traders and utilities. The industry forecasts that global demand for the super-chilled fuel is poised to climb 60% through 2040.
A spokesperson for Macquarie declined to comment.
Macquarie’s physical LNG plans are being developed via a non-banking unit, the people added. The company is looking to expand its team in the coming months, with more hires in locations including London, they said.
The company recently hired former Equinor ASA executive Samuele Ravelli to lead its global LNG trading business.
Macquarie last month signed a sales and purchase agreement for 600,000 tons a year of LNG over 15 years with AMIGO LNG, a Mexican joint venture that aims to start exports in 2028. The bank is also in the process of converting its preliminary offtake pact with the planned Texas LNG project into a definite agreement.
Several banks are considering getting back into physical trading to take advantage of an expected flurry of activity. Regulatory pressure forced financial institutions to pull back from the sector more than a decade ago. JPMorgan Chase & Co. is in talks to start trading physical LNG again, Bloomberg reported last year.
Macquarie has been one of the few banks that has remained active in the LNG market over the last decade, offering solutions including risk management, financing and physical execution.
The bank also has a gas-marketing business in North America and gas and power businesses in the US, Canada, Europe and Asia.
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