Japan, CME join forces to advance LNG trading

CME Group said it has signed a deal to start developing and clearing of Japanese LNG contract.

The world’s largest futures exchange operator entered into a license agreement with Japan’s Rim Intelligence to “exclusively develop and clear energy derivatives based on the Rim DES Japan LNG Assessment, available for submission to CME Clearing via the Japan OTC Exchange, and through OTC brokers,” CME said in a statement on Wednesday.

The company will provide clearing services which will mitigate counterparty risk for users and traders of various OTC energy products developed and based on the Rim DES Japan LNG assessment, Terry Duffy, Executive Chairman and President of CME Group, said.

Christopher Fix, Managing Director and Head ofAsia-Pacific of CME Group encouraged greater involvement by market participants in managing their LNG price risks, and creating a more liquid energy market, as deregulation of the industry continues to pick up pace.

According to Takamichi Hamada, President & CEO of Tokyo Commodity Exchange, and Member of Management Committee of Japan OTC Exchange the clearing service provided by CME Group will enhance the safety of LNG transactions on Japan OTC Exchange which could lead to the further development of the LNG markets in Asia.

LNG World News Staff; Image: Osaka Gas