* E.ON to build LNG portfolio of N.American, Middle East supply
* Expanding in Asia via small LNG trading office in Singapore
By Jacob Gronholt-Pedersen
SINGAPORE, Nov 4 (Reuters) - Germany’s biggest utility E.ON is seeking to secure liquefied natural gas supplies in North America and the Middle East to sell globally, including into Asia, as it moves to diversify away from its core businesses in Europe.
E.ON is looking to capture more of the global LNG market as new projects come online and with Asian demand forecast to boom.
That contrasts with low profit margins in Europe, where a power glut has been met with slowing demand and high fuel import prices, especially for natural gas.
The company is also suffering from a weakening currency in Russia, its most important foreign power market, where a clash between Moscow and the West over the crisis in Ukraine has led to U.S. and European sanctions.
“We’re trying to build up a flexible LNG portfolio with supplies from North America, Africa and the Middle East,” E.ON board member Leonhard Birnbaum said in an interview.
“We are involved in one of the leading U.S. export projects,” Birnbaum said, declining to specify which of the several projects gearing up for export over the next few years E.ON would be taking LNG from.
E.ON has been expanding in Asia through its office in regional trading hub Singapore, where it has set up a small LNG trading desk. About 70 percent of global LNG supply is consumed in Asia.
“Supplies will be used to meet the needs of E.ON’s existing customers and internal demand, and we’re also looking to selectively develop some third-party sales,” he said, without elaborating.
E.ON last year secured 5 million tonnes of LNG a year from Canada’s Goldboro project, expected to begin exports in 2020, as well as supplies from Qatar.
Birnbaum declined to comment on an earlier report by Reuters citing an unnamed source saying that the German government is providing 2 billion euros ($2.5 billion) in financial guarantees to help strike long-term gas import deals for the utility.
The plunge into LNG comes as Russian gas supplies to Europe again face uncertainty amid a conflict in Ukraine that has cooled relations between the West and Russia in their worst confrontation since Soviet times.
Europe relies on Russia for almost a third of its gas needs, with about half of that shipped through Ukraine. Many EU lawmakers have called for lower dependency on Russian gas, with LNG shipped from the United States to make up the shortage.
Despite the dispute with Russia over Ukraine and natural gas deliveries, Birnbaum said Europe should not turn its back on Russia. “It should not be a strategic goal of Europe to be independent of Russia. It should be a strategic goal of Europe to be as diversified as possible,” he said.
$1 = 0.7994 euro Editing by Tom Hogue