LNG derivatives suffer from lack of liquidity

The growth of LNG fuelled high hopes for the LNG derivatives market, causing exchanges to launch a variety of contracts during 2012. But firms say there’s a long way to go before a liquid market emerges. Jay Maroo investigates

LNG tanker

For an extremely cool gas, liquefied natural gas (LNG) certainly generates a lot of heat. The global trade in LNG, which consists of natural gas chilled to temperatures below –160°C, is one of the fastest growing areas of the energy market – a trend that is not expected to change anytime soon. Ocean Shipping Consultants, a UK-based maritime research and consultancy firm, expects the trade in physical LNG to grow from 310 billion cubic metres (bcm) during 2011 to reach 570bcm by 2020 and 880bcm

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