Abaxx Commodity Futures Exchange, a wholly owned subsidiary of Abaxx Technologies (CBOE:ABXX) has seen significant volume growth in its physically deliverable LNG futures during the past summer months, according to Abaxx Exchange Chief Commercial Officer Joe Raia.
Earlier this year, Abaxx Technologies announced the first over-the-counter (OTC) trade of an LNG cargo indexed to Abaxx LNG futures.
“We are averaging at least 4 million MMBtu or over a cargo of our Gulf of Mexico (GOM) Futures each day now with a record last week of over 8.5 million MMBtu in one single day,” Raia said.
He said these volumes represent a confidence in the global LNG markets and a validation of the need for a global benchmark in waterborne LNG.
“Pipeline gas like Henry Hub or TTF, while good inland instruments, have no or little correlation to waterborne LNG. US midstream and E&P companies that are looking to LNG for new markets cannot get real value for their gas by using these pipeline instruments,” Raia said.
“Henry Hub at $3 per MMBtu vs Abaxx GOM at $10 per MMBtu is a perfect example of this,” he said.
“We will continue to bring market makers to our other two Abaxx LNG benchmarks- NW Europe (NWE) and North Asia Pacific (NPA), knowing that markets in these regions also want better correlated instruments,” Raia said.
Two partnerships
Abaxx Exchange and Qingdao International Energy Exchange, a key energy trading platform in China, recently revealed that they intend to explore strategic collaboration in the physical LNG market.
By combining Abaxx’s physically-deliverable LNG futures and clearing infrastructure with Qingdao International Energy Exchange’s established position in China’s energy markets, the collaboration aims to connect international suppliers with China’s demand centers and strengthen Asia’s LNG marketplace.
In addition, Abaxx Exchange and Zhonggong Petroleum & Natural Gas, a fast-growing energy company with provincial-level priority projects in North and Southwest China, developed in coordination with the National Energy Administration, recently announced that they intend to explore a partnership in LNG procurement and related trading services.
The cooperation is expected to connect Zhonggong’s growing infrastructure footprint in Shandong and Yunnan — representing $640 million in strategic LNG investments — with Abaxx Exchange’s trading infrastructure, international supplier network, and market information services.
(This sponsored article was written by Abaxx Technologies with assistance from LNG Prime.)