LNG

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.

Singapore LNG spot cargo prices moved higher again to be over the US$4.500 per million British thermal units level for fixtures to North Asia and the Dubai-Kuwait-India market as September quotes were now available.

The Singapore average index for August increased to US$4.249 per MMBtu from last week’s average of US$4.066 per MMBtu.

Singapore’s latest LNG indices released on June 20 included a price of US$4.071 per MMBtu for the second half of July before edging higher to US$4.201 per MMBtu for the first half of August.

The high volumes of supply in the market continued to impose downward pressure on prices, while crude oil was stable in the week at around $62 per barrel.

Southeast Asia cargo prices for the second half of August were at US$4.298 and were highest for the first half of September at US$4.431.

The Sling is an index series for LNG developed by the Singapore Exchange (SGX) and its subsidiary Energy Market Company (EMC).

It is a spot index for cargoes “on the waters in the vicinity of Singapore which could go into any port” and based on cargo sizes of 135,000 cubic metres capacity to 175,000 cubic metres capacity.

The North Asia price rose to an August average of US$4.560 per MMBtu compared with last week’s average of US$4.361 per MMBtu.

North Asia cargoes for the second half of July were at US$4.361 per MMBtu, before edging up for the first half of August to US$4.512 per MMBtu, then moving higher to US$4.608 for the second half of August.

The first half of September price for the North Asia market was US$4.740 MMBtu, the highest on offer.

The North Asia prices are for delivery ex-ship (DES) to all ports in Japan, Korea, Taiwan and China.

The Dubai-Kuwait-India Sling index for regional cargoes shipped to India and the Middle East averaged US$4.373 per MMBtu for August, an increase on last week’s average of US$4.205 per MMBtu.

The DKI index, based on a cargo of between 138,000 cubic metres capacity and 170,000 cubic metres, is seen in the second half of July at US$4.183 per MMBtu before increasing to US$4.320 per MMBtu for the first half of August.

The price for the second half of August rose to US$4.427 per MMBtu and the highest for the region was fixed at the first half of September price of US$4.570 per MMBtu.

The SGX LNG Index Group (Sling) is an initiative by SGX and EMC for spot LNG price discovery.

It is a benchmark based on assessments of LNG cargo value by market participants. They provide assessments based on the value of an LNG cargo at a specific location for delivery.

The Sling is based on participants submitting assessments to determine an index value.

“The participant pool consists of a broad group of market players to ensure that any Sling Assessment is as representative of actual market conditions as possible,” says the SGX, while pointing out that the participant is kept confidential at all times.

The SGX-EMC LNG prices include both lean and rich cargoes.

Singapore LNG spot cargo prices dropped as excess volumes and lower seasonal demand led to the highest price quoted being under US$5.500 per million British thermal units for the first half of August for North Asia.

The Singapore average index for July dropped to US$5.084 per MMBtu from last week’s June average of US$5.306 per MMBtu.

Singapore’s latest LNG indices released on May 16 included a price of US$5.005 per MMBtu for the second half of June and US$5.052 per MMBtu for the first half of July.

The surplus in global LNG supplies continued to put downward pressure on prices in the Northern Hemisphere summer market as crude oil prices stayed solid on the week at around $71 per barrel.

Cargo prices for the second half of July were at US$5.116 and were highest for the first half of August at US$5.176.

The Sling is an index series for LNG developed by the Singapore Exchange (SGX) and its subsidiary Energy Market Company (EMC).

It is a spot index for cargoes “on the waters in the vicinity of Singapore which could go into any port” and based on cargo sizes of 135,000 cubic metres capacity to 175,000 cubic metres capacity.

The North Asia price fell to a July average of US$5.354 per MMBtu versus last week’s June average of US$5.555 per MMBtu.

North Asia cargoes for the second half of June were at US$5.245 per MMBtu, before rising for the first half of July to US$5.310 per MMBtu, then moving higher to US$5.380 for the second half of July.

The first half of August price for the North Asia market was US$5.475 per MMBtu, the highest on the board.

The North Asia prices are for delivery ex-ship (DES) to all ports in Japan, Korea, Taiwan and China.

The Dubai-Kuwait-India Sling index is assessed in collaboration with London-based, inter-dealer global brokerage Tullett Prebon for regional cargoes shipped to India and the Middle East and averaged US$5.192 per MMBtu for July, much lower than last week’s June average of US$5.400 per MMBtu.

The DKI index, based on a cargo of between 138,000 cubic metres capacity and 170,000 cubic metres, is seen in the second half of June at US$5.113 per MMBtu before edging higher to US$5.167 per MMBtu for the first half of July.

The price for the second half of July was at US$5.217 per MMBtu and the highest for the region was the first half of August price of US$5.320 per MMBtu.

The SGX LNG Index Group (Sling) is an initiative by SGX and EMC for spot LNG price discovery.

It is a benchmark based on assessments of LNG cargo value by market participants. They provide assessments based on the value of an LNG cargo at a specific location for delivery.

The Sling is based on participants submitting assessments to determine an index value.

“The participant pool consists of a broad group of market players to ensure that any Sling Assessment is as representative of actual market conditions as possible,” says the SGX, while pointing out that the participant is kept confidential at all times.

The SGX-EMC LNG prices include both lean and rich cargoes.

Singapore LNG cargo indices dropped below US$7.00 per million British thermal units as the market was purely seasonal, though supported in the background by a steady oil price above $60 per barrel.