The ICIS C1 freight rate assessment for spot liquefied natural gas (LNG) prices has been adopted by the new Ningbo Commodity Exchange (NCE) on forward LNG contracts, under an agreement in place between the exchange and ICIS C1 Energy, an ICIS service in China.
Sean Liu, general manager of ICIS China, and Zhu Jinxiang, general manager of the NCE, signed the framework cooperation agreement at the exchange’s launch ceremony for the platform on 26 December 2013.
According to the agreement, the NCE will adopt the average value of ICIS C1 assessments on freight rates for truck-delivered LNG in China as a benchmark for LNG transactions via its electronic platform. The assessments will also be used as the reference for over-the-counter (OTC) LNG transactions.
“The decision of choosing ICIS C1’s assessment as our freight cost benchmark is consolidated by its reliability and credibility”, said NCE spokesman Shi Mingzhu.ICIS C1 China Freight Rate Assessments for truck-delivered LNG provide logistics costs by distance for LNG delivered from northern regions (north and northwest China), east, south and southwest China to major trading hubs across the country.
“Achieving the benchmark position for China’s first spot LNG trading platform for forward contracts is solid proof of the high level of credibility that ICIS C1 enjoys in the Chinese LNG industry”, said Liu.
Introducing a spot LNG trading platform for forward contracts is aimed at establishing an LNG price system that will truly reflect the market fundamentals in China. An accurate, transparent and reliable Chinese price benchmark will also help companies grow their global LNG businesses and manage their risks in the wider northeast Asia region.
Yang Yu, president of ENN Group, the largest distributor of clean energy in mainland China, said that the platform will become a practical financial tool that truly reflects the China LNG market, adding that ENN will vigorously promote electronic LNG trading.
ICIS is the world leader in providing transparency for physical LNG trade. It publishes the East Asia Index (EAX), an index for the delivered LNG price into Japan, South Korea, China and Taiwan. The delivered prices for the four countries are also assessed separately. It also publishes four other regional LNG indices, 22 country-specific assessments for spot LNG delivered into the world’s major LNG import terminals, and free-on-board (FOB) assessments for all major producing regions.
Adapted from press release by Ted Monroe
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/13012014/icis_price_to_be_used_as_standard_for_lng_trading_in_china/