Commodities trader and investor TrailStone Group has purchased Cargill Inc's gas and power trading group, three sources familiar with the deal said this week.
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The move, first reported by Sparkspread, comes amid a reshuffling in the power and natural gas industry as private equity firms and hedge funds pour into the space, filling a void left by banks and other longtime players.
The banks and others have been pulling back over the past several years as natural gas prices have reached lows not seen in a decade, due to abundant U.S. shale gas and increasingly strict capital requirements and regulations that have pressured banks to reduce their involvement in physical commodities markets.
Swiss-based commodities trader Gunvor Group Ltd this year opened a natural gas trading desk in Connecticut, headed by a former director of natural gas for Freepoint Commodities.
Last September, Hartree Partners lost its head of natural gas trading, and in May, U.S. investment bank Goldman Sachs Group Inc snagged Mercuria Energy Trading's head of natural gas and power trading.
TrailStone already had natural gas and power trading operations in the United States. TrailStone did not respond to a request for comment, and Cargill declined to comment.
(Reporting by Catherine Ngai and Liz Hampton in Houston; additional reporting by Scott DiSavino in New York; editing by Jonathan Oatis)