# Uniper chief says flexible duration LNG contracts key for Europe Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-07-11 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Uniper CEO advocates for flexible LNG contracts in Europe Meta Description: Learn why shorter-duration LNG contracts are crucial for Europe's evolving gas supply landscape. Get insights from Uniper's CEO at LNG 2023 URL: https://financedigest.com/uniper-chief-says-flexible-duration-lng-contracts-key-for-europehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-07-11t000011z2lynxmpej690u9rtroptp4uniper-results-1736813774588-compressed.jpg) By Nia Williams VANCOUVER (Reuters) – Shorter-duration contracts for LNG purchases will be important for Europe’s diversifying supply given uncertainty about long-term gas demand, the new chief executive of German utility Uniper said on Monday. LNG developers prefer 20- to 25-year contracts to help secure financing for the multi-billion-dollar projects. But European nations [committed to moving to renewable fuels within the next](https://www.financedigest.com/auto-lobby-urges-spains-next-government-to-commit-to-decarbonisation.html "Auto lobby urges Spain’s next government to commit to decarbonisation") 20 years have been reluctant to sign deals, creating a stalemate. Uniper CEO Michael Lewis argued for more flexible [terms at the LNG](https://www.financedigest.com/exclusive-germany-qatar-at-odds-over-terms-in-talks-on-lng-supply-deal-sources.html "Exclusive-Germany, Qatar at odds over terms in talks on LNG supply deal -sources") 2023 conference in Vancouver. The [role of liquefied natural gas in Europe’s energy](https://www.financedigest.com/naturgys-profit-rises-on-lng-gains-soothing-shareholders-by-pietro-lombardi-madrid-reuters-spanish-power-utility-naturgy-reported-on-monday-an-88-jump-in-profit-for-the-first-six-months-of.html "Naturgy’s profit rises on LNG gains, soothing shareholders By Pietro Lombardi MADRID (Reuters) – Spanish power utility Naturgy reported on Monday an 88% jump in profit for the first six months of the year, boosted by strong earnings at its liquefied natural gas (LNG) business, which could help it to win over restive investors. Earlier this month, the company said it would increase its dividend floor through 2025 while trimming expected investment, as it sought to make rewarding shareholders a priority. Pleasing them has become a focus as Naturgy considers changes that could reshape the company and after arguments over the potential appointment of a chief executive. Naturgy’s first-half net profit jumped to 1.05 billion euros (.16 billion), boosted by its liquefied natural gas (LNG) business. Shares were down 0.2% in mid-morning trading, bucking deeper declines, in particular for Spain’s blue-chip banks and utilities after a general election on Sunday produced no clear winner. Renta 4 Banco analyst Angel Perez Llamazares said Naturgy performed better than expected, adding “cash flows also beat our expectation,” and debt fell more than expected. After natural gas prices hit record levels last year, Naturgy said a fall in procurement costs this year and hedging gains had boosed profits. In the first half of the year, the company “exceeded the objectives of operating efficiency, cash generation, investment materialisation and debt reduction,” Executive Chairman and CEO Francisco Reynes said. After rival Iberdrola named a separate CEO last year, Naturgy is the only large energy company in Spain to combine the roles of executive chairman and CEO. Earlier this month, the company raised the dividend floor to 1.40 euros a share, from 1.20 euros. Operating profit (earnings before interest, tax, depreciation and amortisation) is expected to reach 5.1 billion euros, compared with a previous guidance of 4.8 billion euros. It said it was targeting net profit of 1.8 billion euros in 2025. Naturgy also relaunched its plan to split regulated infrastructure operations and liberalised energy businesses into two listed companies. The project had been suspended after the Ukraine war disrupted energy markets and analysts are still sceptical. “We believe it is unlikely that Naturgy will be able to implement its asset split in the short term and it is also unlikely that a big change in the shareholding of the company would occur,” said RBC analyst Fernando Garcia. ( = 0.8986 euros) (Reporting by Pietro Lombardi, editing by Inti Landauro and Barbara Lewis)") mix is reasonably secure until 2030, but after that it is “very, very, challenging” to predict gas demand as countries ramp up decarbonization efforts, he said. “We want to continue to diversify geographically but also in terms of the duration of contracts,” said Lewis, who took over as CEO last month. The key challenge will be getting the right pricing and the right flexibility so that you can move that [gas around](https://www.financedigest.com/gas-insulated-transformer-market-estimates-the-to-expand-at-around-5-4-cagr-from-2021-to-2031.html "Gas Insulated Transformer Market Estimates The To Expand At Around 5.4% CAGR from 2021 to 2031") easily, as demand starts to fall in Europe. European countries including Germany are seeking to secure new [energy supplies after Russia cut pipeline gas](https://www.financedigest.com/bulgaria-tenders-for-gas-supplies-to-ride-out-energy-crisis.html "Bulgaria tenders for gas supplies to ride out energy crisis") shipments to the continent. Germany’s response to the [cuts included conservation and launching](https://www.financedigest.com/uks-made-com-to-cut-jobs-and-launch-strategic-review.html "UK’s Made.com to cut jobs and launch strategic review") several LNG import terminals. If [European LNG demand](https://www.financedigest.com/pent-up-demand-prompts-european-travel-recovery-as-covid-curbs-ease.html "Pent-up demand prompts European travel recovery as COVID curbs ease") is uncertain, Asia’s emerging markets continue to grow as they move away from coal, said Sarah Bairstow, president of Mexico Pacific Ltd, speaking on the same panel. Trading houses that can aggregate demand from a number of established and emerging [markets will become more important to advancing](https://www.financedigest.com/the-advancement-based-offing-to-upscale-the-vinasse-market.html "The Advancement-Based Offing To Upscale The Vinasse Market") LNG export terminal projects. Those [markets are a little more difficult for project](https://www.financedigest.com/carbon-black-market-projected-to-garner-significant-revenues-by-2018-2026.html "Carbon Black Market Projected to Garner Significant Revenues by 2018-2026") developers,” Bairstow said. It’s really caused an emergence again of the role of aggregators and traders as we see [emerging markets](https://www.financedigest.com/allergy-immunotherapy-market-emerging-players-may-yields-new-opportunities-2017-2025.html "Allergy Immunotherapy Market: Emerging Players May Yields New Opportunities 2017-2025") coming back into play. (Reporting by Nia Williams; editing by Gary McWilliams and Leslie Adler) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---