* 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 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)