Trading in liquefied natural gas and electricity

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Two markets have taken on new importance since 2022. Liquefied natural gas, whose cargoes are traded like those of oil, has seen its global trade reorganised after the halt of Russian pipeline deliveries to Europe. The Geneva houses, already present in gas, then increased their positions, with long-term contracts with American, Qatari and African producers and a logistics chain of LNG carriers and terminals.¹ Electricity, long traded by specialised players, has become an activity of the large traders, who buy and sell blocks of energy on the European markets, finance renewable installations and provide flexibility services to the grids.²

These markets differ from the traditional markets in their dependence on infrastructure — terminals, grids, storage capacity — and in their regulation, which is denser than that of oil. They bring trading closer to public utilities and to energy policy while exposing traders to new risks, the measure of which was given by the extreme price volatility of 2022: several energy traders had to obtain exceptional credit lines to cover the margin calls on their hedging positions.³ Part H describes what these episodes mean for financing.

Notes

Trafigura, 2023 Annual Report: 11.2 million tonnes of LNG traded during the 2023 financial year (13.0 million in 2022, 14.0 million in 2021) and 23.9 million tonnes of natural gas; “higher LNG imports from the US, Asia and Middle East combined with increased pipeline supplies from Africa, Azerbaijan and Norway resulted in a complete change of trade flows in Europe”; Gunvor Group, “Results 2022”: volumes reduced to 165 million tonnes (240 million in 2021), mainly owing to the decline in natural gas trading. ↩
Trafigura, 2022 Annual Report: Nala Renewables, a 50:50 joint venture with IFM Investors, “pressed ahead with investments in solar power, onshore wind and battery storage to progress towards its 4GW renewable energy target”; renewable portfolio of 2.8 GW at the end of 2022 (1.7 GW in 2021), investments of 170.6 million dollars; plan for a one-gigawatt renewable hydrogen plant in Denmark; Wikipedia (en), art. “Mercuria”: acquisition in 2021 of the clean-energy specialist Beyond6 for 169 million dollars. ↩
Trafigura, press release of 8 December 2022: total credit lines raised to 73 billion dollars with some 140 banks; Trafigura, 2023 Annual Report: 75 billion with some 150 banks; ECB, Financial Stability Review, November 2022: initial margins roughly twice as high in mid-2022 as at the end of 2021; Reuters (hl.co.uk), 26 February 2024, quoting a trading-house executive: “We all faced margin calls and rushed to borrow from banks”. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.

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Dr Alexander Ressos, TEP

Rechtsanwalt/Attorney-at-Law

I am a Swiss attorney-at-law and also admitted as a solicitor in Hong Kong and in England & Wales, with almost 25 years of experience.

Together with my multilingual team, including Chinese, Japanese, Korean, Russian, Ukrainian and French native speakers, I advise companies and their owners from around the world on the full range of banking, corporate, commercial and tax law matters in Switzerland, including international tax planning, fiduciary services, and legal family office services including immigration & relocation or real estate investments. My practice has a particular focus on clients from growth and frontier markets in Greater China, Central Asia and the Caucasus, the rest of Asia, the Middle East, Africa and Latin America, and I equally advise clients from Europe and North America. Through an affiliated Swiss trust company, we also take care of the incorporation and ongoing administration of their companies and other structures, including accounting, tax returns and corporate secretarial services, and I serve as a professional director where required. With the support of a network of first-class cooperation partners, I also implement solutions worldwide.

My approach is to act as a trusted advisor who works directly with decision-makers, on an equal footing: I start from what you want to achieve and shape every structure, contract and tax decision around your commercial goals and how it improves your after-tax return. As “lawyers who make it happen”, my team and I stay involved until your company is set up, your structure is in place and your transaction has closed, and we remain available for any follow-on work that may be required. You benefit from bespoke solutions and personal attention, and sound, friendly and practical advice. We are not the lowest-cost provider in the market, nor do we intend to be; our aim is to deliver well-founded, proper solutions and excellent value for money.

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Trading in liquefied natural gas and electricity

Notes

Setting up or expanding in Switzerland?