Global Markets

LNG hedging tools set to diversify

The growing flexibility of LNG cargoes is giving exchanges the opportunity to expand their range of hedging instruments The growing flexibility of LNG cargoes is giving exchanges the opportunity to expand their range of hedging instruments.
By Peter Stewart 18 July 2018 0 31783
The Arctic Lady LNG tanker. (Hoegh)

Exchanges in London and the United States have proposed LNG futures and LNG freight contracts this month that could expand the range of hedging instruments available to suppliers, end-users and traders to manage price risk. 

The Chicago Mercantile Exchange (CME) signed an agreement earlier this month with Cheniere to develop an LNG futures contract with physical delivery at the company’s Sabine Pass plant on the US Gulf Coast. The CME has offered several financial instruments for hedging in the past, including swaps contracts based on price...