Intercontinental Exchange and S&P Global to launch window to boost LNG trade and pricing

Thursday, 11 July 2019
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Intercontinental Exchange Inc. a leading operator of global exchanges and clearing houses, and US energy pricing company S&P Global Platts said they were launching an electronic platform known as eWindow for the liquefied natural gas market.

Unlike oil, which has several financial and physical trading platforms and exchanges, LNG markets are still evolving with various companies offering different productions

Platts, a unit of the US credit rating agency S&P Global Inc, already uses the eWindow platform as part of its pricing process.

The platform allows participating companies to key in their bids, offers or transactions directly and which appear on a screen for others to see.

It is aiming to launch the new platform with ICE in a few months.

ICE and Platts said the eWindow platform will be an online data-entry and communications tool that allows market participants in the Platts Markets On Close (MOC) price assessment process to communicate bids, offers and transactions directly to Platts editors and the marketplace simultaneously.

“Its grid-like screen offers an easy, at-a-glance view and allows market participants to instantly respond to the bids and offers submitted,” said a statement.

“The eWindow method is already widely adopted to power the MOC process for key oil benchmarks and now will be accessible for Platts LNG price assessments, such as Platts Japan Korea Marker, the benchmark price for LNG delivered into Northeast Asia,” they added.

ICE already has the broadest range of natural gas benchmarks, hosting UK National Balancing Point, Dutch Title Transfer Facility, Henry Hub and the Japan Korea Marker prices, allowing market participants to hedge their price risk via futures and options for the major gas hubs globally.

ICE-JKM LNG (Platts) futures and options contracts are increasingly being used as the benchmark contract for LNG in Asia and continue to break new trading records as one of the fastest growing natural gas benchmarks and the most liquid Asian natural gas benchmark.

ICE-JKM LNG hit a record 44,394 lots for futures and options combined in June and reached a new open interest record of 52,080 lots, at the end of June.

“As LNG markets continue to liberalize and new types of price agreements emerge between buyers and sellers of LNG, a range of hedging products are critical to allow the market to hedge risk and manage price exposure,” said the companies.

Chuck Vice, deputy chairman of ICE said Platts and ICE have had a long and successful history of working together to bring transparent price discovery to energy markets.

“The launch of eWindow is an important milestone in the ongoing maturity and evolution of LNG markets, moving it to the next level in terms of standardization and transparency,” he said.

“ICE is home to the broadest range of natural gas benchmark futures markets with an established and growing global community of gas traders using futures and options to transact and manage their price risk,” he stated.

Trading does not occur on the eWindow, but the tool's compatibility with ICE technology allows eWindow users to execute trades on the ICE platform without leaving the Platts MOC price assessment process and environment.

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