The global LNG market is currently one of the fastest growing sectors in the energy industry and is expected to continue evolving over the next few years. As new participants in this global trade market emerge, the business of international gas trade is adjusting to changes such as supply and demand, resources, and other geopolitical concerns.
The United States has emerged as the world’s largest gas producer and consumer – and is expected to continue this trend into the future. Over the next several years, not only will the US become a swing supplier of LNG it will also become a top-three exporter of LNG alongside Australia and Qatar.
Since the US began exporting LNG three years ago, exports have grown significantly. This trend is expected to continue as additional US LNG facilities are completed in 2019 and beyond.
Additionally, the overall number of countries importing LNG has continued to increase. The United States is expected to be the primary source of incremental liquefication capacity over the next five years. Six projects are currently approved and under construction on the Gulf and East Coasts.
To offer market participants an additional tool for managing global LNG risk, CME Group has launched Gulf Coast LNG Export futures, the first-ever physically delivered LNG contract.
Participants will take delivery at Cheniere Energy’s Sabine Pass facility. Freeport’s LNG terminal will be included in future delivery months.
Developed with key industry participants, LNG futures will help transform LNG trading with a futures contract that offers standardized terms and conditions and the financial guaranty of CME Clearing.
LNG futures will provide the same transparency, flexibility, liquidity, and security found in our other Energy benchmark products.
Available on CME Globex, CME ClearPort and through Trayport Joule Direct, Gulf Coast LNG Export futures will be available to trade Sunday afternoon through Friday afternoon, almost 24 hours per day. Margin offsets will be available for with other CME Group Energy products.
As the LNG market continues to grow to meet the increasing global gas demand, market participants need a way to hedge their price risk. Gulf Coast LNG Export futures allow price discovery and risk management in this growing marketplace.
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