IntercontinentalExchange to Launch LNG Cleared Swap on Japan Korea Marker

IntercontinentalExchange to Launch LNG Cleared Swap on Japan Korea Marker

IntercontinentalExchange (ICE), a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets, today announced it will launch a new liquefied natural gas (LNG) cleared swap contract based on the Platts daily assessment for the Japan/Korea Marker (JKM).

The Platts JKM, introduced in 2009, reflects the daily open-market value of spot LNG delivered to Japan and South Korea on a daily basis. It has since become a benchmark reference in the industry for calculating price differentials for Asia-Pacific supply source and destination markets and is increasingly used in outright contract pricing.

The new cleared swap contract, which is subject to regulatory approval and non-objection, will be cash settled on a monthly basis in U.S. Dollars and available from August 2012. The contract size will be 10,000 Million Metric British Thermal Units (MMBtu) and 24 consecutive contract months will be available.

ICE offers over 730 cleared OTC energy contracts including more than 40 Asia specific energy swaps. The launch of the Japan/Korea Marker LNG swap adds to ICE’s broad range of OTC energy products, which includes the 180cst Singapore Fuel Oil swap, Asia’s leading refined product derivative and an important price benchmark for the region.

ICE Clear Europe enables the efficient development of new products to support the risk management needs of member firms and customers in ICE’s global energy futures and OTC markets. In 2002, ICE pioneered the concept of cleared OTC energy contracts, which provide participants with access to centralised clearing and settlement arrangements while reducing bilateral credit risk and capital required for each OTC trade.

LNG World News Staff, June 1, 2012