Baltic Exchange launches LNG-powered indices

The London-based Baltic Exchange has launched a new set of independent indices for the LNG-powered seaborne trade as owners opt for the fuel to slash emissions.

The new set of indices went live on March 2, based on LNG carriers burning liquefied natural gas, rather than marine fuel oil or marine gas oil, as their primary fuel, the exchange said.

In addition, the exchange will publish the indices with the acronym BLNGg twice per week, alongside the current LNG indices which are based on LNG carriers burning very low sulphur fuel oil (VLSFO), it said.

Historical data for the new indices will be available dating back to January 1, 2020, according to the organisation acquired by the Singapore Exchange in 2016.

Moreover, CME Group plans to launch three new futures contracts based on the new Baltic Exchange indices on March 22, pending regulatory review, the statement said.

“As LNG markets continue to evolve globally, demand for new tools to manage the risk around its transportation is also growing rapidly,” said Peter Keavey, global head of energy at CME Group.

“The introduction of contracts based on the usage of LNG as bunker fuel among global shipping routes is the next step in the evolution of freight and provides another market-based solution to help our customers to manage their global gas risk,” he said.

Since the introduction of the 2020 Global Sulphur Cap by the IMO, the majority of LNG carriers have switched to boil-off gas rather than burn low-sulphur fuel oil, marine gas oil or install emissions abatement technology, the statement said.

Furthermore, the boil-off process allows the naturally evaporating LNG cargo to go to the engine room. After that, the main boilers burn it as fuel, it said.

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