LNG

Intercontinental Exchange, the leading global provider of energy trading platforms for futures and options, has issued natural gas and oil trading volumes and related statistics for December contracts and those for other periods of 2022 when there was a jump in derivatives for gas and interest rates in the fourth quarter and the full year.

Switzerland's Axpo, the largest producer of renewable energy and an international leader in energy trading and marketing, has been granted a subordinated credit line of up to 4 billion Swiss francs ($4.07Bln) because of “unprecedented turmoil” on European power markets.

Intercontinental Exchange, a leading global provider of energy trading platforms for futures and options, reported very high volumes for June and for the second quarter highlighted derivatives included North American natural gas, the European Union benchmark Dutch Title Transfer Facility and North Sea Brent crude oil.

Woodside, the Western Australian LNG exporter, posted a record US$2.35 billion of LNG sales in the fourth quarter, more than tripling the results of US$607 million in the prior-year quarter as prices sky-rocketed.

Intercontinental Exchange, the leading global provider of trading platforms and clearing, has posted record activity in two key LNG trading derivatives, US Henry Hub natural gas and the Dutch Title Transfer Facility (TTF), the European benchmark.

ICE also announced record total futures open interest of more than 48.1 million contracts on August 25.

The platform’s North American natural gas futures and options, which includes the Henry Hub and US Basis Markets contracts, hit record open interest of 23 million, up 10 percent year-over-year, with open interest in Henry Hub futures and options up 28 percent year-on-year.

The natural gas futures and options reached record open interest of almost 3.3 million contracts.

The Dutch TTF is increasing in importance as energy traders and asset owners manage their global gas price risk.

The Dutch TFF, reflecting LNG cargo values in Europe, was last at $16.50 per million British thermal units and tight natural gas markets in the European Union and in the UK.

The UK National Balancing Point benchmark natural gas prices was even higher than the Dutch TTF at $16.85 per MMBtu on August 30.

“TTF holds open interest out to December 2028. In June, ICE extended the TTF curve to December 2031 following demand from commercial hedgers to further align TTF with typical lengths of medium to long term deals between LNG buyers and sellers, and to help market participants manage long term risk,” explained ICE.

“The globalization of natural gas, which is contributing to the growth of TTF, has also led to the establishment of the Asian natural gas benchmark ICE JKM LNG (Platts) where open interest is up 26 percent year-on-year,” said ICE.

The Henry Hub, Dutch TTF, JKM and NBP futures and options form part of ICE’s global natural gas complex alongside the West India Marker (WIM) LNG (Platts) and the Spark LNG Freight Futures contracts

.Open interest across ICE’s global environmental complex was also up 21 percent across futures and options, as participants use these markets to also price climate risk.

“As the market manages changes in interest rates, open interest in Interest Rate futures and options is up 26 percent year-on-year,” ICE added. 

Intercontinental Exchange, the leading global provider of trading platforms and clearing, has posted record activity in two key LNG trading derivatives, the European benchmark Dutch Title Transfer Facility (TTF) and the Japan-Korea Marker for North Asian spot cargoes.

Intercontinental Exchange, the leading US operator of global exchange platforms and clearing houses, said the LNG freight futures contracts based on Spark Commodities price assessments had a successful launch with 30 lots traded on the first day.

The Intercontinental Exchange, the US-based operator of global trading platforms and clearing houses, plans to launch LNG freight futures contracts for the Atlantic and Pacific Basins, adding to a portfolio of sector offerings already including Japan-Korea Marker spot LNG cargo and Dutch Title Transfer Facility European benchmark derivatives.

ICE is introducing the new LNG freight futures contracts 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.

“These new contracts - called the Spark30S Atlantic and the Spark25S Pacific LNG Freight Future contracts - are traded and settled in US dollars per day,” explained ICE.

The numbers in the contract names indicate the number of days it takes an LNG carrier to complete a return voyage on the respective routes.

The settlement price of the contracts are based on the Spark30S (Atlantic) and Spark25S (Pacific) LNG freight spot price assessments.

“Market participants can use the contracts to manage price risk in respect of round-trip voyages between the US Gulf Coast and North West Europe (Spark30 assessment) and Australia and Japan, Korea, Taiwan and China (Spark25 assessment),” ICE explained.

Atlanta, Georgia-based ICE said it planned to start offering these cash-settled futures contracts on March 22, 2021, subject to regulatory approval.

ICE said the freight contracts would form part of its global natural gas complex as the market manages freight price risk alongside existing Dutch TTF, UK National Balancing Point, US Henry Hub, JKM LNG (Platts) and the West India Marker LNG futures contracts (WIM LNG - Platts).

“We have been in close engagement with the LNG market for more than two years about the right assessment on which to base LNG freight futures,” said Gordon Bennett, Managing Director of Utility Markets at ICE.

“During that time, LNG freight markets have become increasingly volatile, significantly increasing demand for suitable LNG freight risk management tools,” added Bennett.

“We believe that our freight futures contracts, priced against Spark’s assessment, will provide the hedging tools the market has been waiting for,” he declared.

ICE said the freight futures would trade and clear alongside the highly liquid and global gas benchmarks on ICE.

Tim Mendelssohn, Managing Director of ICE’s partner Spark, explained the aims of the new product.

“After a summer of LNG freight rates at record lows, this winter followed with the highest LNG freight rates ever assessed, peaking at $322,500/day on January 8, 2021,” said Mendelssohn.

“This volatility necessitates new risk management tools as well as future orientated, tech-driven price discovery platforms,” he stated. 

CME Group Inc., the global derivatives company for energy and other commodities to hedge physical LNG, natural gas, oil or gasoline trading reported a surge in first-half income but failed to repeat the record numbers for March and April 2020.

US private equity firm Harbour Energy has raised its offer to $US10.8 billion ($A14.2Bln) for Santos, the stakeholder in three Asia-Pacific LNG export ventures, provided the Australian company puts in place hedging for the soaring oil price.