(Bloomberg) -- JPMorgan Chase & Co. is in talks to start trading physical liquefied natural gas again after more than a decade on the sidelines, a move that lines up with Chief Executive Officer Jamie Dimon’s calls for an increase in domestic production and energy exports.
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The bank has held talks to secure a longterm LNG supply with at least three projects under development in the Gulf Coast, according to people familiar with the matter. The move is part of a wider push JPMorgan has made in recent years to get back into trading some of the physical commodities it abandoned in 2014.
Discussions are underway between the bank and developers looking to build a project to liquefy and export gas in Louisiana called Commonwealth LNG, Sempra Energy’s expansion of its Port Arthur site under construction in Texas and Energy Transfer LP’s planned Lake Charles LNG facility in Louisiana, the people said, asking not to be identified describing the confidential negotiations.
Spokespeople for JPMorgan, Sempra, and Kimmeridge Energy Management Co., which owns Commonwealth, declined to comment. A representative for Energy Transfer didn’t respond to multiple requests for comment.
Global demand is surging for LNG, with many nations seeking a cleaner-burning alternative to oil and coal as they shift toward renewable energy. The US has emerged as the world’s largest exporter thanks to an abundant supply of gas and the development of huge terminals on the Gulf Coast to liquefy and ship the fuel.
JPMorgan’s effort is the latest twist in what’s been a bumpy saga for top Wall Street firms’ involvement in the physical commodity space over the past two decades. JPMorgan inherited Bear Stearns’s energy-trading platform when it bought the failed bank during the financial crisis, and bulked up through additional acquisitions in 2009 and 2010.
By 2014, JPMorgan agreed to sell much of its physical commodities arm — though the New York-based company hung on to its metals desks — as banks grappled with heightened regulatory scrutiny in the business. But within a decade, the firm was back to trading in the physical natural gas space.
JPMorgan has expanded its physical natural gas trading operation in the US since 2022 and is eyeing US power, as well as gas and power in Europe, where it recently applied for a natural gas shipper license, some of the people said. Still, the firm has no plans to physically move LNG on water themselves, opting to stick to activities such as financing and hedging, two of the people said.