JERA, Vitol in First Atlantic LNG Swap under Baltic’s BLNG3

LNG traders JERA Global Markets and Vitol have executed the first Atlantic LNG freight swap against The Baltic Exchange’s BLNG3 assessment in a bilateral trade arranged by Affinity Financial Products LLP.

The BLNG3 assessment provides a freight rate benchmark for LNG shipments between Sabine Pass and Tokyo. The benchmark is on a time charter equivalent basis with a panel of independent shipbrokers providing headline time charter rates and a ballast bonus and/or position fee assessment to give an effective rate paid by a charterer on round voyage terms.

“Following on from our initial trade in July when the Baltic’s BLNG1 assessment went live, we are very pleased to have been able to arrange a bilateral trade against the BLNG3 route,” said Benjamin Gibson, Head of LNG Derivatives at Affinity.

“Our BLNG3 route only went live in mid-August and we’re delighted to see the first trade settled against it. The Baltic’s LNG assessments are being quickly adopted by this developing market as an accurate and reliable benchmark,” Baltic Exchange Chief Executive Mark Jackson added.

“Further bilateral trades will help develop the understanding and adoption of freight benchmarks within the industry,” Gibson added.