• 27 Mar 2017

Intercontinental Exchange Inc (ICE) said on Wednesday it will soon begin trading a first-ever U.S. liquefied natural gas (LNG) futures contract. In an exchange note to customers, ICE said it planned to list the new contract on May 4, subject to completion of necessary regulatory processes.

The new ICE contract, whose size will for 2,500 MMBtu, will be a monthly cash future settled against thewill be cash-settled against the Platts LNG Gulf Coast Marker (GCM) price assessment and use Platts-derived U.S. GCM LNG forward curves for daily settlement purposes. The curves will have an initial tenor of 48 months.

"Domestic and international market participants now have a risk management solution that lays the foundation for a more effective means of hedging their spot and forward exposure," said J.C. Kneale, vice president, North American power and natural gas markets at ICE, in a statement.

Only one LNG export facility is currently operational in the US, the Cheniere Energy-operated Sabine Pass terminal (with two 4.5 million mt/year trains currently exporting, and a third set for substantial completion by the end of this monthl) but a number of other plants are due to start up in the coming years. US LNG production capacity is expected to rise to some 70 million mt/year by 2020, making it the world's third largest LNG exporter after Qatar and Australia.

The new support of ICE will help to make wholesale LNG market increasingly global and liquid, helping the growth of new small scale LNG market.