LNG

Clarksons, the UK provider of integrated maritime services including broking, finance and research has brokered the world’s first 174,000 cubic metres capacity LNG Forward Freight Agreement (FFA) trade with the Chicago Mercantile Exchange (CME) Group.

SEA-LNG, the multi-sector industry coalition established to demonstrate the commercial and environmental benefits of LNG as a marine fuel, has signed up Mexico’s natural gas company Énestas as a member and it will help provide insights into Mexican and US LNG infrastructure and bunkering.

Énestas is focused on providing competitive access to raw materials and fuels necessary for the development of regional industries and communities in Mexico.

SEA-LNG said that in doing so, Énestas has successfully built and implemented innovative logistics projects that are “one of a kind” in Latin America, including the fast-tracked Coatzacoalcos project in the Mexican state of Veracruz.

Énestas has the largest LNG distribution network in Mexico and is expanding gas infrastructure and logistics solutions in the region including LNG bunkering, where it sees strong opportunities.

“The firm is proud to join SEA-LNG as a partner that will help ship owners and operators to move forward towards a cleaner future for shipping with LNG,” said Miguel González de Cossío Vigil, Commercial Director of Énestas.

“SEA-LNG’s high-quality research and networking opportunities will be invaluable to the Énestas team as we continue to enhance gas and fuel accessibility,” he added.

Steve Esau, Chief Operating Officer, of SEA-LNG said he was delighted to have Énestas on board.

LNG expansion

“We are pleased to be able to support Énestas in its goal of safely and efficiently expanding LNG supply and bunkering infrastructure in Mexico and the USA, creating jobs and economic benefits in a key maritime region,” Esau stated.

Peter Keller, Chairman of SEA-LNG, concluded that the body is a catalyst for uniting the LNG fuel sector

“SEA-LNG continues to unite organisations from across the LNG value chain to further improve LNG availability worldwide, and to help the global shipping industry to address local emissions,” Keller said.

SEA-LNG said the recent addition of Énestas to its membership supports this drive and noted that the UK-based ship services company Clarksons reported that LNG was now available as bunkering fuel at 185 ports worldwide with a further 50 re-fuelling facilities planned by 2025.

Daewoo Shipbuilding and Marine Engineering (DSME) of South Korea said it was awarded two combined orders worth 1.84 trillion Korean won ($1.53 billion) to build two LNG carriers for Greek company Maran Gas Maritime under the Angelicoussis Shipping Group and six containerships for another European commercial line.

June 2 (LNGJ) - Korea Shipbuilding and Offshore Engineering (KSOE), the world's leading shipbuilding group comprising Hyundai Heavy Industries, Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries, said orders have come in from five customers for 12 ships valued at $1.2 billion. The orders include four LNG carriers and a mid-scale liquefied petroleum gas (LPG) carrier, which will be delivered by the first half of 2024.

   At the end of May, global new orders for ships came to 17.95 million compensated gross tons (CGTs), representing 83 percent of the 21.50 million CGTs ordered last year, said KSOE, citing market data firm Clarksons.

Intercontinental Exchange, the leading operator of global energy derivative exchanges and clearing houses, reported an increase in first-quarter revenues as it continued to launch new products to meet customer demand, including most recently LNG freight futures and a range of Abu Dhabi oil futures and options.

ICE said in the quarter ended March 31, 2021, consolidated net revenues were $1.8 billion, up 15 percent year-over-year including exchange net revenues of $974M, fixed income and data services revenues of $468M and mortgage technology revenues of $355M.

Revenue from energy trading products dropped by 12 percent overall in the quarter after the winter peak to $310M from $353M in the same three months of $2020.

Exchanges operating income for the first quarter came to $653M and operating margin was 67 percent.

ICE, based in Atlanta, Georgia, launched its LNG freight futures contracts on March 23 based on price assessments from Spark Commodities with 30 lots traded on the first day.

First day trading included 15 lots of Spark30S Atlantic and 15 lots of Spark25S Pacific LNG freight futures contracts for the June 2021 contract expiry.

These first trades involved some of the LNG industry’s leading market participants including Total, Gunvor, Vitol, and Glencore, and were brokered by Clarksons, showing strong support for the new contracts.

ICE introduced the new LNG freight futures based on price assessments from Spark Commodities, a provider of technology-based solutions for promoting market liquidity.

Singapore-based Spark is backed by French data firm Kpler and EEX, part of the Deutsche Börse Group.

LNG and gas products

The ICE freight contracts form part of ICE's global natural gas complex alongside existing benchmark natural gas and LNG derivatives such as the Dutch TTF, the UK National Balancing Point, US Henry Hub, JKM LNG (Platts) and the West India Marker (WIM LNG) contracts.

“We are pleased to report strong first-quarter results that extend our track-record of growth. As we emerge from the Covid-19 pandemic, never have our digital networks proven more needed and resilient,” said Jeffrey C. Sprecher, ICE Chairman and Chief Executive.

“We are grateful to our customers that continue to rely on our technology, data and market infrastructure, and we remain focused on innovating across asset classes to drive greater efficiency and transparency,” declared Sprecher.

Adjusted net income attributable to ICE increased by 9 percent to $758M compared with $695M in the 2020 first quarter.

Free cash flow amounted to $702M versus $434M in the prior-year period.

At the end of the quarter on March 31, ICE launched its oil futures contract for LNG exporter Abu Dhabi and a total of 8,854 cleared lots were traded on the first day.

The start of trading of the ICE Murban Crude Oil Futures (IFAN) had been delayed from 2020 by the market oil market slump and Covid-19.

ICE Murban Crude Oil Futures opened for trading alongside 18 Murban-related cash settled derivatives and inter-commodity spreads, offering the market the broadest range of ways to trade and hedge Murban crude.

Market activity on ICE Futures Abu Dhabi on the first day of trading included 6,344 ICE Murban Crude Oil futures contracts and 2,510 Murban related cash settled derivative contracts.

A total of 27 firms traded on day one of the launch.

Royal Dutch Shell has confirmed its leadership in liquefied natural gas supply for LNG-powered ships by chartering another bunkering vessel under construction in Spain.

Oct 29 (LNGJ) - Shipping charter rates for LNG carriers in the spot market increased over the past week by a further $20,000 per day. Rates were quoted at an average of between $100,000 per day and $110,000 per day West of Suez. The same levels of spot rates were also talked about for the East of Suez charter market for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers.

March 5 (LNGJ) - Shipping charter rates for LNG carriers in the spot market have fallen again amid the global over-hang of volumes. Rates were quoted at an average of between $39,000 per day and $34,000 per day West of Suez and $38,000 per day and $33,000 per day East of Suez for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers. One-year time charters for vessels of between 155,000-160,000 cubic metres capacity were seen at around $61,000 per day.

The Baltic Exchange freight derivatives markets for both tankers and dry cargo vessels saw increased traded volumes last year when the exchange also launched the first Forward Freight Agreement (FFA) trades in the LNG market. 

Settled against the Baltic’s recently launched suite of assessments for gas shipping, the first LNG swap took place in July 2019, with cleared trades following at the end of 2019 and open-interest building.

The Exchange said in its annual review that freight derivatives markets for both tankers and dry cargo vessels saw increased traded volumes in 2019.

In LNG, the London-based Exchange collects data from shipping brokers to provide assessment of three routes on the CME Group trading platform.

These are from Australia’s Gladstone port in Queensland to Tokyo, from the US Sabine Pass LNG plant in Louisiana, owned by Cheniere Energy, to the UK. A third freight contract is from Sabine Pass to Tokyo.

In the overall freight derivatives markets Tanker Forward Freight Agreement (FFA) volumes were up 38 percent in 2019 compared the previous year, reaching 473,113 lots. 

Dry FFA volumes hit 1,632,773 lots, up 11 percent on 2018. 

One lot is defined as a day’s hire of a vessel or 1000 metric tonnes of ocean transportation of cargo.

“It was another solid year in 2019 for the freight derivatives market,” said, Baltic Exchange Chief Executive Mark Jackson.

“Underpinning these volumes are both volatility in the freight markets and trust in the Baltic Exchange’s settlement data,” he said.

“Last year both the dry bulk and tanker markets experienced big swings, with issues ranging from the Vale iron ore disaster, attacks on tanker shipping in the Middle East and IMO2020 impacting sentiment,” added Jackson.

The Exchange has also just launched in February 2020 daily spot ocean freight rate indices for 40-foot containers (FEUs).

The rate is now available via the Exchange and the Freightos Group, adding real-time, transparent price discovery and risk mitigation into the container freight market that powers global trade. 

The Freightos Baltic Index (FBX) has been produced weekly since April 2018 by digital freight platform Freightos, based off of live pricing data from hundreds of global logistics providers.

“With the robust, real-time data, as well as oversight from the Baltic Exchange, the FBX is positioned better than ever to provide a true pulse of the market in one of the world’s largest and most important industries,” said Freightos CEO Zvi Schreiber.

“Container shipping pricing has become volatile and FBX will be the foundation of index-linking and future derivatives which allow carriers, forwarders and imports-exporters to hedge their risk, as is already customary in other industries,” added Schreiber.

The Exchange, which already manages a diverse range of benchmarks for the global shipping markets, is also in the process of applying for Benchmark Administrator status with the UK’s Financial Conduct Authority (FCA).   

Clarksons, the London-based ship brokers and shipping and financial services company, said it had completed the world’s first LNG freight futures trade at year-end involving two of the leading global commodities traders.