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Mitsui aims to expand LNG trading operation

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LNG Industry,

Reuters are reporting that Japan's Mitsui & Co Ltd plans to expand its LNG trading operation as demand for the fuel spurs more spot transactions in Asia.

The move comes amid a big shift in the market in Asia, which takes in about 70% of global shipments of LNG, with traders and end users increasing their ability to trade in anticipation of a supply influx from Australian and US projects.

Companies such as Tokyo Gas and Kansai Electric Power that often tie up with Mitsui and other Japanese trading houses are expanding trading operations after winning more flexible terms on contracts, allowing them to resell excess cargoes.

The company will increase the number of LNG traders in the next few years from only a few now.

Around 260 million t of LNG was shipped globally in 2016, according to the International Group of Liquefied Natural Gas Importers (GIIGNL). Spot trades, defined by GIIGNL as cargoes delivered within three months from the transaction date, totaled around 47 million t, 15% higher than in 2015.

Japan takes in nearly a third of global shipments but in the last year China has emerged as a big importer.

Mitsui traded 2.8 million t of LNG in the year ended 31 March, but will receive more supplies from next year when the Cameron LNG project in Louisiana starts operations.

The Japanese company has signed up to take 4 million t of LNG annually from the project, with some of it tied up in term contracts leaving it with volumes to trade.

China currently imported about 26 million t of LNG in 2016, up by a third from a year earlier.

The company is also looking for buyers for supplies from an LNG project in Mozambique led by Anadarko in which Mitsui has a stake.

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