ICE Expands Global Natural Gas Liquids Complex with the Launch of a Liquid Petroleum Gas Houston to Chiba Freight Future Based on Baltic’s BLPG3 Assessment
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, announced that it plans to launch a new freight futures contract based on the Baltic Exchange’s liquid petroleum gas (LPG) assessment for the Houston to Chiba route on September 27.
The contract, called the LPG (BLPG3) Forward Freight Agreement (FFA) Houston To Chiba (Baltic) future, will be cash settled and allow participants to manage freight price risk on one of the top export routes for liquid petroleum gas. The U.S. is one of the world’s top producers and leading exporters of LPG and Asia is one of the largest demand centers for the fuel. Freight rates from Houston to Chiba have fluctuated between $45.75 and $182.40 per ton since the Baltic Exchange began reporting on the route in April 2020*.
“Hedging the U.S. Gulf Coast to Japan export route has become ever more critical for our customers,” said J.C. Kneale, Vice President, North American Gas and Power, at ICE. “ICE’s natural gas liquid markets are growing strongly, with open interest out to 2024. With the new LPG freight contract, we are helping our customers to further manage their entire portfolio of exposure for LPGs from production to shipping to consumption.”
The new BLPG3 contract will trade alongside ICE’s existing LPG freight future based on the Baltic Exchange’s assessment for the Middle East to Japan route (ICE: WAT).
*Source: Baltic Exchange
Source: Intercontinental Exchange