All aboard for LNG freight derivatives?

Tools to manage LNG freight risk were developed last year, but how is the market responding?

In recent years there has been a sea change in the way liquefied natural gas (LNG) is traded. It has shifted from a market predominantly based on long-term contracts priced against oil, to one with a growing spot market where cargoes are generally priced using the gas market. While this makes for more flexibility, it also leaves more companies than ever before exposed to LNG freight prices, something that was usually included in the long-term fixed deals. And while gas-on-gas pricing has allowed