LNG

The London-based Baltic Exchange, the main independent global source of maritime market information for the trading and settlement of physical and derivative shipping contracts, has named LNG Hub Singapore as the leading global shipping centre.

The Baltic Exchange Escrow Service continues to gain traction, with new transactions completed in the fourth quarter of 2019 and the first three months of 2020.

The Baltic Exchange, owned by the Singapore Exchange, follows a robust due diligence process and complies with the Monetary Authority of Singapore requirements without compromising on flexibility and service speed to ensure the transactions are handled seamlessly. 

This is reinforced by the strict internal control of fund movements from the dedicated escrow account held with AA-rated Singapore banks Overseas-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB).

The escrow service, operated from Singapore, facilitates both shipping and non-shipping transactions around the world. 

Escrow services give certainty to all sides in a transaction that payments will be made on completion as they are held by a trusted third party.

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

These form the basis for a suite of assessments for gas shipping and freight contracts, the first LNG derivative swap took place in July 2019, with cleared trades following since then as company built open-interest positions.

The LNG swaps based on shipments 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.

So far the Baltic Exchange’s transactions supported by escrow have included asset sales and disputes. However, the service is available for any transaction requiring an escrow agent. 

The Baltic Exchange is an independent organisation whose international membership is mainly made up of shipowners, shipbrokers and charterers. 

It is the provider of trusted benchmarks and settlement data in the shipping industry. Its escrow service builds on this independence and trust. 

Users of the service are assured of the highest levels of confidentiality, professionalism and security. 

“The Baltic Exchange acted as escrow agent in the context of a recent sale and purchase transaction providing a professional, swift and efficient support at each stage of the process,” said customer  Federico Grimaldi, Sale &Purchase Manager at shipping company Vroon B.V.

“A customer-oriented approach, professionalism and high responsiveness of the Escrow team allowed for a seamless transaction,” added Grimaldi.

Dmitry Pismenny, who heads up the escrow service, said that the Exchange was very pleased to see growing interest in the escrow service. 

“Our flexibility and efficiency in supporting different types of transactions has earned plaudits from our clients.,” added Pismenny.

The prices of spot LNG cargoes declined by around 11 percent during the past week with December 2019 and January 2020 deliveries being quoted at $6.30 per million British thermal units for China and South Korea.

Spot LNG cargo prices sprung into life after weeks of drift with December averages for North Asia breaking the $6.800 per million British thermal units level and with January 2020 shipments to China, Korea and Japan priced at around US$7.250 per MMBtu.

LNG spot cargo prices were flat over the past week with higher values quoted for December volumes with the second half of December window priced at $6.500 per million British thermal units for shipments to China, Korea and Japan.

LNG spot cargo prices were flat over the past week with mostly higher quotes reserved for December volumes peaking to an average of at least $6.250 per million British thermal units for shipments to southeast Asia and North Asia.

Singapore LNG spot forward cargo prices declined by around 6 percent in the past week as demand stalled in Asia amid some high December quotes for shipments to China and South Korea.

Singapore LNG spot forward cargo prices jumped by as much as 25 percent in the past week as demand improved in Asia and December quotes appeared for shipments for China and South Korea at US$6.650 per million British thermal units.

Singapore LNG spot cargo prices dropped half a percentage point on the week from already low levels with only Asian and Middle East cargoes for delivery in the second half of November maintaining values over US$5.000 per million British thermal units amid ample supplies.

The Singapore Exchange (SGX) and Energy Market Company (EMC) are to discontinue the publication of the prices and indices for spot LNG cargoes for Southeast Asia, North Asia and Dubai, Kuwait and India.