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Platts Liquefied Natural Gas (LNG) Forward Curves

Quantitatively Derived Forward Curves

The U.S. shale revolution and resulting increased exports of U.S. liquefied natural gas (LNG) has positioned the U.S. to play a new primary role in the global natural gas and LNG markets. US exports of LNG commenced in February 2016 with the arrival to the market of the first Sabine Pass cargoes which increased the global liquefaction capacity by 25%.


In response to growing U.S. LNG export volumes, Platts LNG Gulf Coast Marker (GCM)and Japan-Korea Markers (part of the DLF Market Data Category) provide optionality and transparency of LNG prices unparalleled in global markets. DLF offers real opportunities for participation in this emerging spot and derivative market by financial marketers, traders and other product off takers.


Designed to help clients manage LNG market price risk, LNG Forward Curves provide fair market value-based forward curves and supporting analytical data for the key LNG trading hubs, Asia (FOB Korea), and North America (FOB USGC). Platts JKM™, extending over 24 tenors and Platts GCM, extending over 48 tenors, provide clients with a market value that combines Platts editorial market knowledge and quantitatively-derived forward curves available within DLF.


Platts JKM is the LNG benchmark price for spot physical cargoes representing trade in Northeast Asia. Platts JKM reflects delivered ex-ship spot LNG prices for cargoes delivered into Japan and South Korea, the world’s two largest LNG importers. Trades into China and Taiwan are also captured in Platts JKM using a process of freight normalization.


Platts JKM is referenced in LNG contracts both in Northeast Asia and globally. It is used to calculate royalties and transfer pricing in various exporter countries and is also used to settle financially traded JKM swaps.


Platts LNG GCM reflects bids, offers and transactions on an FOB U.S. basis, normalized to the U.S. Gulf Coast, and expressed USD per British thermal units (MMBtu). Customers have expressed a desire to see an active derivative market based on the US Gulf coast market dynamics. GCM forward curves provide a logical settlement price to ICE which will facilitate the development of such a contract.


Who Should Subscribe

Platts LNG Forward curves provides essential market intelligence for traders, risk managers of LNG portfolios, LNG analysts, product off takers, and other energy professionals who need unbiased price assessments for both short- and long-term price and analysis.


Benefits

Platts LNG Forward Curve enables precise and informed valuations for superior investment and trading decisions. Emphasize your commitment to efficient risk management by using the checks and balances of a Platts independent, third-party solution to:


  • Make more informed trading and investment decisions
  • Calculate mark-to-market profit and loss
  • Calculate key risk metrics, such as value-at-risk
  • Report the fair value of financial instruments
  • Validate internally derived forward curves and ensure compliance
  • Manage counterparty credit exposure
  • Download and integrate flexible data (delivered daily) into your own system

Clients need to subscribe to the LF market data category as a pre-requisite for DLF. Customers can access the new DLF category by FTP or as part of the PGA Data add-on service. This is also available from our channel partners and through the API. Contact support@platts.com to get started. We will work to ensure that your staff has access to the data it requires, distributed in a way that facilitates your company needs.


Further Information

For insight about the methodology underpinning the JKM Forward Curve and the LNG GCM Forward Curve, please view the Methodology and Specifications Guide.


View our Commodity Pulse LNG Market video where our experts evaluate why the US is critical to the development of liquidity in the global market and how spot pricing and derivative contracts can play into that evolution


If you have questions related to the models, you can talk directly to Manny Mughini, our Senior Manager Quantitative Analysis, part of the Commodity Risk Solutions team: https://platts.24sessions.com/mannymughini


Basic Delivery

Platts LNG Forward Curves are delivered via FTP or as part of the PGA Data add-on service. The files are also available with your subscription at www.platts.com.


Delivery Partners

Platts partners play a critical role in helping your company succeed. We've struck cooperative partnerships with the world's foremost data delivery and analysis companies to help you leverage the information we provide and extend its value throughout your organization. Please contact us to find out if you can access Platts LNG Forward Curves through your existing vendor's delivery platform


FOR MORE INFORMATION

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