ICE to Launch New LNG Futures Contracts for Europe

ICE last week announced plans to launch two LNG futures contracts for northwest and southwest Europe by Dec 5.

• The new contracts are designed to help market participants trade and hedge the difference in price between LNG for delivery in northwest and southwest Europe, the price of pipeline gas to Europe, and the price of LNG across the rest of the world.
• The EU Commission is looking for an alternative LNG price benchmark based on LNG cargo deliveries.
• "Reflecting the energy situation which exists within Europe today, customers need a futures contract to price LNG imports into Europe and provide a means to manage the difference with the price of natural gas delivered via pipeline," said Gordon Bennett, managing director of utility markets at ICE.
• The new contracts will be cash-settled based on Spark Commodities’ price assessments for LNG cargos and priced in $/mmbtu.