* Plans to hire 10 staff in Singapore, Europe, Houston
* Aims to promote LPG over diesel in power generation
* Sees need for hedging tools in Asia's power, gas sectors
By Florence Tan
SINGAPORE, Feb 24 (Reuters) - France's international utility company Engie has started a global desk to trade liquefied petroleum gas (LPG) and plans to promote the fuel as a replacement for diesel in power generation, senior executives said on Thursday.
The utility company's trading arm plans to hire 10 people in Singapore, Europe and Houston to move growing LPG supplies from the United States to other parts of the world, Engie Energy Management's CEO Eric Simon told Reuters.
The United States has become the top exporter of LPG, already sending record volumes to Asia to meet growing demand from residences as cooking and heating fuel and petrochemical complexes for making plastics.
LPG replaces coal in Engie's trading portfolio as the company has decided to exit that business to focus on cleaner energy sources such as gas and renewables, Simon said.
"We have to replace this asset class with another one which has much less carbon emissions and which makes sense in terms of trading," he said.
LPG is a mixture of propane and butane produced as a by-product of U.S. shale gas or other natural gas output.
Besides supplying LPG globally, the trading unit will also provide risk management and work with Engie's utility division to promote power plants fuelled by propane in Asia, Latin America and Africa, according to the chief executive.
LPG could replace diesel used in power generators in remote places such as islands and in countries that need time to start natural gas production or build infrastructure.
"This could be a competitive solution especially if the alternative is diesel," said Engie Asia Pacific's President and Chief Executive Officer Jan Flachet.
Myanmar, for example, is developing its own natural gas output but in the meantime it could install LPG-fired power plants, Flachet said.
LPG is traditionally used a bottled cooking fuel, but the use of propane as a petrochemical feedstock has also been growing in Asia.
Major LPG traders include U.K.-based Petredec, Japan's Astomos Energy, Royal Dutch Shell, Vitol and Itochu Corp.
Engie - formerly known as GDF Suez - has been trading derivatives of crude oil and products such as middle distillates and fuel oil in Singapore since 2012, hedging risks for the company's other businesses and external clients, said Simon.
"We're not interested in trading physical oil," he said. "What we're seeing is the development of gas and power markets in Asia," for instance in India, where changes to the gas price formula could increase hedging needs from end-users.
Reporting by Florence Tan; Additional reporting by Seng Li Peng; Editing by Tom Hogue