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The Future Is Now for LNG as Derivatives Trading Takes Off

  • ICE’s JKM contract volume increases 10-fold in two years
  • But liquidity still trails other, established energy contracts
An employee walks inside a liquefied natural gas (LNG) storage tank under construction. 

An employee walks inside a liquefied natural gas (LNG) storage tank under construction. 

Photographer: Tomohiro Ohsumi/Bloomberg
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With natural gas demand growing faster than for any other fossil fuel, LNG futures may be finally taking off.

Derivatives represented about 2 percent of global LNG production at the beginning of 2017 as an array of contracts around the world struggled to gain traction. But by the end of last year, volumes had grown to almost 23 percent, led by a burgeoning Intercontinental Exchange Inc. contract based on S&P Global Platts’ Japan-Korea Marker spot price assessments.