22 March 2021

Clarksons completes the first ever Spark LNG freight futures trade on ICE

Clarksons is pleased to announce that during the Singapore morning session on 22nd March 2021, it completed the first LNG freight futures trades on the Intercontinental Exchange ("ICE") between Total, Vitol and Gunvor. Later in the London trading day, an additional transaction was closed with Glencore.

The original trade was a June spread trade between Spark25 Pacific and Spark30 Atlantic taking place shortly after the products launched on ICE. Two LNG freight futures (Spark25S Pacific NWS to Tianjin LNG and Spark30S Atlantic Sabine Pass to Gate LNG) are now listed on ICE and are based on the Spark assessments.

Christian Greenop, who led the transaction from Clarksons Forward Freight Agreement ("FFA") team, said:"We are happy to complete the first Spark30S Atlantic and Spark25S Pacific trades on ICE and continue to work very hard in developing the LNG FFA market. There is a great demand to hedge LNG freight exposure and we hope to see liquidity improving over the following months."

"The unprecedented price volatility observed on the chartering market this year has underpinned the need for a derivative product allowing us to hedge the shipping capacity of our LNG portfolio and to position ourselves to benefit from arbitrage opportunities arising in the market. The LNG Freight Future contracts on ICE provides us with the ability to more proactively manage our shipping exposure," said Patrick Dugas, VP LNG Trading in Total Gas & Power.

Tim Mendelssohn, Managing Director of Spark Commodities, added: "Early adoption of the Spark contracts by leading LNG market participants demonstrates strong market support for contracts and tools that provide greater transparency in a critical part of the LNG value chain."