Ørsted AS on Dec. 18 signed an agreement to divest its LNG assets, a business the Danish energy company said had been “loss-making.”
Multinational trading house Glencore Plc agreed to acquire the LNG business, which Ørsted said had performed well during the last few years but has been “loss-making and is projected to remain so for years to come.”
Ørsted added that financial improvements to its LNG business would require further contractual commitments, something that would not fit into the company’s strategy to focus on expanding its renewable energy business.
The company, currently the world’s biggest offshore wind farm developer, had entered the LNG business in December 2007 through a long-term agreement with the Dutch LNG regasification terminal Gate in Rotterdam regarding the right to use 3 billion cubic meters of annual regasification capacity from 2011 to 2031.
Today, Ørsted’s LNG business consists of the long-term regasification capacity agreement with the Gate terminal in Rotterdam and five LNG purchase agreements.
The divestiture of its LNG business is projected to have a positive impact on Ørsted’s EBITDA from 2020 onwards, according to the company release.
The transaction is expected to close summer 2020. Terms were not disclosed.
Recommended Reading
Appeals Court Rules in Favor of FERC-Permitted Indiana NatGas Line
2025-01-08 - “As night follows day, an environmental challenge follows the approval of a natural gas pipeline,” a Court of Appeals, D.C. Circuit panel said in ruling in favor of a Boardwalk Pipeline expansion project.
DOE Approves Non-FTA Permit Extension for Golden Pass LNG
2025-03-05 - Golden Pass LNG will become the ninth U.S. LNG export facility following the U.S. Department of Energy’s approval for an extension of its non-free trade agreement permit.
Court Rejects Activists’ Protest of Woodside LNG Pipeline Project
2025-03-31 - Woodside Energy Group prevailed against environmental groups’ arguments to stop a pipeline to Louisiana LNG in a case that originated before the Australian company bought the project.
Trade War! Or Maybe Not
2025-03-06 - An energy industry that prefers stability gets hit with whiplash as it attempts to adjust to the Great Disruptor taking over the White House.
Trump Fires Off Energy Executive Orders on Alaska, LNG, EVs
2025-01-21 - President Donald Trump opened his term with a flurry of executive orders, many reversing the Biden administration’s policies on LNG permitting, the Paris Agreement and drilling in Alaska.