ICE to Launch European LNG Futures for North-West and South-West Europe and Three Supporting French, German and Italian Natural Gas Futures
October 27 2022 - 8:05AM
Business Wire
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global
provider of data, technology, and market infrastructure, today
announced plans to launch two liquid natural gas (LNG) futures
contracts for North-West Europe and South-West Europe.
The contracts are designed to help market participants trade and
hedge the difference in price between LNG for delivery in
North-West and South-West Europe, versus natural gas provided by
pipeline to Europe, as well as LNG across the rest of the
world.
The contracts will be cash settled based on Spark Commodities’
price assessments for LNG cargos and priced in USD per MMBTu in
line with ICE’s existing LNG contracts. The contracts are due to
launch on December 5, subject to regulatory approval.
“Reflecting the energy situation which exists within Europe
today, customers need a futures contract to price LNG imports into
Europe, and provide a means to manage the difference with the price
of natural gas delivered via pipeline,” said Gordon Bennett,
Managing Director of Utility Markets at ICE. “The price of natural
gas in Europe remains high because of an imbalance between supply
and demand, caused by the significant reduction in the supply of
natural gas into Europe from Russia and the downstream impact of
physical capacity constraints across the European natural gas
network.”
“Futures markets are providing important price signals to
identify the location of these bottlenecks, allowing for capital to
be allocated efficiently to address them by adding, for example,
regasification capacity to import more LNG,” continued Gordon
Bennett. “Futures markets are also a key risk transfer mechanism to
reduce exposure to spot markets and thus a critical avenue for
energy firms to manage their risk so they can maintain a stable
source of energy to European societies. We continue to work closely
with our customers, regulators and governments to find market-based
solutions to the pressures caused by the energy crisis and ICE is
ready to assist with developing an EU futures market based on the
complementary LNG benchmark to be developed by the EU Agency for
the Cooperation of Energy Regulators (ACER).”
Additionally, ICE plans to launch three supporting French PEG,
German THE and Italian PSV Natural Gas 1st Line contracts on
December 5, subject to regulatory approval. The cash settled
contracts will trade and settle in USD per MMBTu and provide market
participants with additional flexibility to manage their LNG import
exposure. ICE already offers physically delivered PEG, THE and PSV
futures which are priced in Euros per megawatt hour.
ICE is home to the natural gas benchmark TTF, a physically
delivered contract which upon expiry results in natural gas being
added to, or taken from, the TTF natural gas hub via title
transfer. TTF trades from ICE in Amsterdam, producing a daily
settlement price based on transactions of customers physically
buying and selling natural gas and is the world’s second most
liquid natural gas contract after the U.S.-based Henry Hub.
TTF and the new North-West Europe LNG futures are complemented
by ICE’s existing German, Italian, French and Austrian natural gas
futures and together with the new South-West Europe LNG futures,
which add coverage of Iberia and the Mediterranean, will increase
the choice of pricing and risk management tools available to market
participants.
The five futures contracts will trade from ICE Futures Europe
and clear at ICE Clear Europe alongside global energy benchmarks
including Brent Crude, TTF natural gas, European Carbon Allowances,
Coal and Electricity, offering meaningful margin offsets across
energy portfolios to maximize liquidity and capital efficiency.
The new contracts will form part of ICE’s global natural gas
portfolio alongside the existing TTF, NBP, Henry Hub, JKM LNG
(Platts), WIM LNG (Platts) futures, and the Spark30S Atlantic and
Spark25S Pacific LNG freight futures.
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune
500 company that designs, builds and operates digital networks to
connect people to opportunity. We provide financial technology and
data services across major asset classes that offer our customers
access to mission-critical workflow tools that increase
transparency and operational efficiencies. We operate
exchanges, including the New York Stock Exchange, and
clearing houses that help people invest, raise capital and
manage risk across multiple asset classes. Our comprehensive fixed
income data services and execution capabilities provide
information, analytics and platforms that help our customers
capitalize on opportunities and operate more efficiently. At ICE
Mortgage Technology, we are transforming and digitizing the
U.S. residential mortgage process, from consumer engagement through
loan registration. Together, we transform, streamline and automate
industries to connect our customers to opportunity.
Trademarks of ICE and/or its affiliates include Intercontinental
Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.
Information regarding additional trademarks and intellectual
property rights of Intercontinental Exchange, Inc. and/or its
affiliates is located here. Key Information Documents for
certain products covered by the EU Packaged Retail and
Insurance-based Investment Products Regulation can be accessed on
the relevant exchange website under the heading “Key Information
Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995 -- Statements in this press release regarding
ICE's business that are not historical facts are "forward-looking
statements" that involve risks and uncertainties. For a discussion
of additional risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statements, see ICE's Securities and Exchange Commission (SEC)
filings, including, but not limited to, the risk factors in ICE's
Annual Report on Form 10-K for the year ended December 31, 2021, as
filed with the SEC on February 3, 2022.
ICE- CORP Source: Intercontinental Exchange
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version on businesswire.com: https://www.businesswire.com/news/home/20221027005586/en/
ICE Media Contact: Rebecca Mitchell
Rebecca.Mitchell@ice.com +44 7951 057 351
ICE Investor Contact: Katia Gonzalez
katia.gonzalez@ice.com (678) 981-3882
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