Geneva-based energy trader Gunvor said it has signed a new syndicated borrowing base facility to support the working capital needs of its growing LNG activities globally.
The syndication launched at $800 million and was oversubscribed following strong appetite from the market, predominantly in Asia, the Middle East and Europe, and closed at $1.135 billion, Gunvor said on Thursday.
Also, the facility, structured around global LNG trade flows including Gunvor’s shipping activities, would finance physical and derivative positions, the firm said.
As a part of the facility, Gunvor has committed to CO2 carbon emissions reporting to establish transparency for the carbon footprint of the company’s LNG value chain, it said.
“The success of this new LNG borrowing base demonstrates a strong commitment from banks to support Gunvor’s growing LNG business through innovative structures,” said Tawfik Sadfi, head of structured trade finance at Gunvor Group.
“Gunvor’s clearly defined trading strategy and business model—which function hand-in-hand with our sustainability commitments—continue to attract the confidence of the market,” he said.
“First of its kind for LNG trading”
Dutch Rabobank said this facility marks the “first of its kind for LNG trading” and includes scope 1, 2, and 3 emissions measurement commitments.
Gunvor has previously announced commitments in the areas of environment, social, and governance (ESG) targeting a 40 percent reduction in the company’s scope 1 and 2 emissions by 2025.
Tracking and reporting of scope 1, 2, and 3 emissions related to the trading of LNG adds further to those commitments, Gunvor said.
The active bookrunners, Rabobank and Societe Generale, respectively, served as facility and security agent and documentary agent of the new facility. Also, they are joined by Natixis Singapore Branch as mandated lead arranger.
Lead arrangers include Abu Dhabi Commercial Bank, CA Indosuez (Switzerland), Industrial and Commercial Bank of China, London Branch, KFW IPEX – Bank, and SMBC bank International.
Rabobank said the facility, which coincided with “unprecedented volatility” in the market, “reflects the strong interest of banks to support responsible participants in the growing global LNG market, one of the main enablers of the energy transition.”
Spot LNG prices have surged this year and they are still trading above $35/MMBtu.
Gunvor is the largest independent LNG trader in the world and works in the spot market as well. The firm’s LNG trade rose from 4 million tonnes in 2016 to 16 million tonnes in 2019. It did not provide the exact numbers for its 2020 LNG trade.
The trader has earlier this year signed a 10-year deal with Tellurian to buy Driftwood LNG volumes. In addition, its unit Clearlake Shipping recently signed deals to charter four LNG carriers from Celsius Shipping.
