Ørsted winds down its LNG business with sale to Glencore, which is busy scaling its up

On 18 December, Ørsted announced it had divested its LNG business to Glencore. Ørsted will pay Glencore an undisclosed fee to take on its loss-making LNG portfolio. The deal includes long-term capacity access of 3 bcma at the GATE terminal in the Netherlands out to 2031 and five LNG purchase agreements. The divestment of Ørsted’s LNG business comes as no surprise. The losses Ørsted incurred in its LNG business were predominantly due to the terms of the 3 bcma regas capacity contract at GATE which it signed in 2007. Pure LNG trading for Ørsted has mainly been profitable, though not enough to offset the losses from GATE. Glencore is actively building a larger and more long-term focussed LNG business, in both the Atlantic and the Pacific basins. It will expect to use the GATE capacity position more heavily than Ørsted and will also see value in the optionality that GATE offers for storage and reloading, adding balance and flexibility to its portfolio.