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Clarksons completes first ever Spark LNG freight futures trade on ICE

Posted on: 23 March 2021

Clarksons, a leading provider of integrated services and investment banking capabilities to the shipping and offshore markets, 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.”

Patrick Dugas, VP LNG Trading in Total Gas & Power, a major player in the energy market, stated: “The recent price volatility observed on the chartering market this year underpins the need for a derivative product allowing us to hedge our portfolio and to benefit from arbitrage opportunities arising in the market. The ICE & Spark partnership on listing this contract provides us with the opportunity to take advantage of it.”

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.”

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