Japanese Exchange to Trade LNG Futures Within Two Years

Japan, the world’s largest buyer of liquefied natural gas, plans to list the world’s first futures contract for LNG within two years, Bloomberg News reported Friday.

The futures, to be traded in dollars on the Tokyo Commodity Exchange, will be based on an index price for spot LNG cargo delivered to Japan, Bloomberg said, citing a Japanese government official.

LNG futures will allow consumers and producers to hedge against price swings, while challenging the current method of linking the fuel’s cost to oil, Bloomberg said.

The New York Mercantile Exchange trades crude oil, gasoline, heating oil and natural-gas futures. Heating oil is sometimes seen as a proxy for diesel, as both are distillate fuels.