JPMorgan Chase & Co (NYSE: JPM) To Enter Liquefied Natural Gas Market

JP Morgan Chase & Co (NYSE: JPM) announced that it would be entering into the liquefied natural gas (LNG) market on Wednesday under a deal with U.S. LNG natural gas importer Cheniere Energy.

Under the terms of the two-year agreement, JPMorgan and Cheniere will jointly look into buying opportunities in the global LNG marketplace, combining Cheniere’s existing LNG assets with the buying power that JPMorgan has.

JPMorgan Chase will now have import rights for up to 2 billion cubic feet per day of natural gas at Cheniere’s Sabine Pass import terminal in Louisiana. The deal should allow Cheniere to buy more LNG and give JPMorgan access to an asset like Sabine Pass, which gives the bank a firm foothold on the LNG Market.

“We can buy much larger quantities of LNG with the help of JP Morgan than we could by ourself,” said Charif Souki, chief executive officer of Cheniere Energy, to Reuters. “They have a balance sheet and we have assets, which is a pretty good match.”

JPMorgan is one of many banks looking to enter into LNG commodities trading, following Morgan Stanley, Citigroup and Barclays Capital.

“We see a market changing very rapidly and we see a greater need for intermediaries,” said Paul Polosi, head of Global Power, Gas, Coal and Emissions at J.P. Morgan to Reuters.