Intercontinental Exchange, the leading operator of global energy derivative exchanges and clearing houses, is planning to launch its oil future contract for liquefied natural exporter Abu Dhabi on March 29, backed by leading LNG sector players.
The exchange said that that trading on the ICE Murban Crude Oil Futures (IFAN) is going ahead subject to the completion of regulatory approvals
The IFAN futures debut in the markets had been delayed in 2020 by the market oil market slump and the Covid-19 pandemic.
“We are making good progress on securing the regulatory approvals necessary for launch. We have received approval from the Bank of England for ICE Clear Europe to clear contracts traded on IFAD and IFAD is now a Recognized Market Operator by the Monetary Authority of Singapore,” explained Jamal Oulhadj, President of ICE Futures in Abu Dhabi.
“We believe that the combination of our partners, ICE’s extensive global energy network and customer base, and the capital efficiencies created by clearing Murban alongside Brent, West Texas Intermediate, and Dubai, mean that Murban futures should have a deep base of support as the market uses the futures to buy, sell and hedge Murban crude,” added Oulhadj.
The Murban Crude Oil Future is a physically delivered contract, basis free-onboard (FOB) cargo at the Fujairah loading terminal in the UAE.
The contract will provide users with an effective hedging instrument for Arab Gulf crude oil and other grades of trading into the Asia-Pacific region.
Abu Dhabi also produces LNG as well as oil for the United Arab Emirates and is aiming to increase its natural gas resources by investing more in exploration and production in the next few years.
It currently produces around 5.8 million tonnes per annum of LNG at the Das Island liquefaction plant off Abu Dhabi.
In addition to the approvals from the Bank of England and Monetary Authority of Singapore, ICE Futures Abu Dhabi said it had completed the relevant regulatory processes or analysis required to permit direct access to IFAD from a range of jurisdictions including Abu Dhabi Global Market, the United States, Switzerland, the Netherlands, France, Norway, Australia, Japan and South Korea.
Contracts traded at IFAD will be cleared at ICE Clear Europe, a leading energy clearing house, and will clear alongside ICE’s global energy futures platform covering oil, natural gas and the environmental complex, allowing customers to benefit from associated margin offsets.
Inpex Corp., the Japanese oil and gas company with stakes in major LNG export plants and projects such as Ichthys and Prelude FLNG in Australia and Abadi LNG in Indonesia, is one of the companies that IFAD venture.
The other energy companies joining the launch of IFAD include Royal Dutch Shell, BP of the UK, PetroChina, Total, PTT of Thailand, Japan’s JXTG Nippon Oil & Energy and the international commodities traders Vitol.