CME launches U.S. LNG futures contract with physical delivery

From Reuters Sept. 4:

Exchange operator CME Group said on Wednesday it would launch a futures contract for liquefied natural gas (LNG) that is physically delivered at U.S. Cheniere Energy’s Sabine Pass export terminal, a move likely to increase transparency in the market.

The contract, to be launched on Oct. 14, will have 24 delivery months, meaning a market participant in October could buy an August 2020 LNG cargo and trade it up until the delivery date.

It will help buyers to manage risk, giving them exposure to the fastest growing source of LNG supply while at the same time shedding light on physical and future LNG prices in an nascent and opaque market.

A number of other contracts have been launched in the past two years related to LNG and LNG shipping as supply of LNG and the infrastructure to both export and receive it has expanded rapidly....MORE