Powernext is to introduce financially settled LNG contracts on its trading platform PEGAS, expanding its extensive European offering for spot and futures gas trading with a globally traded commodity.
This is another significant step for EEX Group as it moves into the global commodity exchange space.
The new LNG products shall be introduced in February 2019 and will be settled against the Platts JKM assessment published by S&P Global Platts.
In recent years, the market for liquefied natural gas (LNG) has grown significantly and Platts JKM® has also grown in relevance, both in Asia and Europe, enabling Powernext to offer a standardised product. The assessment is published by Platts on a daily basis. The Powernext offering comprises the registration of LNG futures for clearing, which are financially settled against Platts JKM.
“Liquidity in Asia has increased in the last years and Platts JKM is today the most reliable assessment for this region. We are confident that we will see further development and even more trading activity in the future,” says Aude Filippi, responsible for growth initiatives at Powernext.
Platts JKM reflects the supply and demand situation in Asia. Together with TTF in Europe, traders will be able to hedge their cargos and optimise their portfolios. Powernext already offers futures and options for the TTF hub, so that the corresponding hedging transactions can be carried out via the PEGAS platform. This will be possible for up to two years in advance.
Egbert Laege (pictured), President of Powernext and CEO of EEX Asia, EEX Group’s Asian commodity exchange, adds: “The launch of these contracts represents the first step in Powernext’s LNG strategy and confirms the ambitions of EEX Group as we transition into a Global Commodity Exchange.”
In the last few years, EEX Group has successfully entered into markets outside Europe, most notably via its Asian based exchange EEX Asia which offers trading of freight, energy and metal contracts and via the US-based entity Nodal Exchange which offers power and natural gas contracts as well as environmental products in the US.