Germany's SEFE Eyes Global LNG Expansion After Securing $55 Billion Gas Deal in Norway

(Reuters) — Fresh from clinching a 50-billion-euro ($54.43 billion) pipeline gas deal in Norway last month, Germany's SEFE is looking for more suppliers to offer liquefied natural gas (LNG) for its customers, its CEO told Reuters on Thursday.

"We will continue to expand our core business. We will further diversify our procurement portfolio," CEO Egbert Laege said on the sidelines of a Handelsblatt conference in Berlin.

SEFE is central to European energy supply security as it delivers 200 terawatt hours (TWh) per annum of natural gas to industry and onward distributors predominantly in Germany, Britain and seven other European markets, and operates big underground storage sites.

The deal with Norway's Equinor covers half that sum.

In its quest to replace the formerly dominant Russian supplier Gazprom, which suspended deliveries in 2022 amid the war in Ukraine, SEFE worked hard to keep other supplies on board, to find new sources and to gain prominence in LNG markets after being nationalized by the German government.

"We managed to re-enter into business with all our trade partners, some of whom had suspended cooperation with us because the ownership was unclear," Laege said.

This paid off financially, resulting in a "significant triple-digit million euro gross margin" in 2023, he said.

In the future, the company will engage in more wholesale trading at European hubs.

An LNG sourcing deal in August with Oman opened doors for further talks to procure gas in the Middle East, adding to ventures in the United States, and the intention was also to place volumes in overseas markets in a supplier role, Laege said.

This approach makes sense as European gas demand beyond 2040 is uncertain, while Asia also needs gas and customer relationships require long preparation times, he said.

SEFE intends to supply big Asian industrial companies and other buyers in the long run, targeting a 30% to 50% share of LNG in its portfolio, he said.

SEFE also wants to become an off taker of clean hydrogen, a key energy source that many countries hope will help decarbonize industries, and of electricity from renewables, such as already existing projects it is involved in placing the output from wind power in Britain.

($1 = 0.9187 euros)

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