Asian LNG price-index gains traction

Traders are in favour of liquefied natural gas (LNG) price assessments for Asian spot trading, according to energy broker Tullett Prebon, and moving away from prices linked to oil

Asia has no liquid natural gas markets to price spot LNG. And although most countries have signed long-term contracts linked to oil, traders want a price index that better reflects the cost of LNG to sell spot cargoes. Leading the way is Platts' Japan Korea Marker (JKM), a daily assessment of LNG delivered to Japan and South Korea as a proxy for all Asian prices. Based on the JKM price, CitiBank executed the first LNG swap with an international oil major earlier this year. A swap facility allows commodity traders to offset some of the risk from market price movements. “There’s at least one cargo a month being sold on JKM indexation,” Tullett Prebon LNG manager Melissa Lindsay told the LNG Gl