CME Group, Cheniere to develop Sabine Pass LNG futures contract

Image courtesy of Cheniere

U.S. exchange operator CME Group and LNG player Cheniere Energy reached a deal to develop an LNG futures contract with physical delivery to Cheniere’s Sabine Pass terminal on the U.S. Gulf Coast.

Cheniere’s Sabine Pass LNG terminal first started exports in February 2016, and currently operates four trains capable of producing 18 million tonnes of LNG per year.

A fifth train is under construction and a sixth is fully permitted, representing up to 27 million tonnes per year of LNG capacity at the site.

“In recent years, the shale revolution has unlocked abundant supplies of natural gas here in the U.S., creating new risks and opportunities for producers, processors, consumers and traders,” Peter Keavey, CME Group Global Head of Energy said in a statement.

“Through its Sabine Pass liquefaction facility, Cheniere is delivering Henry Hub-indexed natural gas to the world in the form of LNG. This agreement with Cheniere is significant because it will be the foundation for developing a new LNG risk management tool for producers, consumers and traders around the globe, while further cementing the role of Henry Hub Natural Gas futures as the global gas pricing benchmark,” Keavey said.


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