By Stine Jacobsen
COPENHAGEN (Reuters) -Energy trader Danske Commodities has received a 3.5 billion euro ($3.71 billion) capital injection from parent company Equinor to boost liquidity as it contends with highly volatile energy markets.
Soaring energy prices and extreme market volatility have forced multiple European utilities and traders to secure extra funds to cover margin call requirements.
“When prices go up, so does the size of margin calls on the energy exchanges,” Danske Commodities’ finance chief Jakob Sorensen said in a statement.
“Trading companies … must post collateral to cover potential price fluctuations in the period from when a trade is struck to when the energy is actually delivered.”
Equinor’s gas and power chief Helge Haugane, who also chairs Danske Commodities, said he was pleased with Danske’s performance.
“We are glad to make this capital injection to further strengthen Danske Commodities’ position in a market environment which requires a high degree of solidity and liquidity to function as well as to prepare for continued growth,” he said in the statement.
Equinor declined to comment further on the capital injection.
Energy trader Danske said in September that it had secured extra funds from the Norwegian oil major at a time when margin calls soared to record highs in Europe.
Equinor, majority owned by the Norwegian state, has become Europe’s largest supplier of natural gas, giving it record profits after a sharp drop in pipeline volumes from Russia’s Gazprom since the start of the Ukraine war.
European gas importers have so far been the biggest corporate victims of the energy crisis, with Germany’s Uniper costing the government more than 50 billion euros to date and facing de facto nationalisation.
($1 = 0.9425 euros)
(Reporting by Stine JacobsenEditing by Terje Solsvik and David Goodman)
