Users of Ice will be able to cross-margin between Ice’s UK natural gas contract and the UK natural gas futures contract traded on the International Petroleum Exchange (IPE), which is also cleared through the LCH. Ice acquired the IPE last year.
Ice said it intends to launch clearing for German and UK power contracts on the LCH later in the year, following the introduction of bilateral trading of these contracts on Ice in May. In July, the exchange announced a deal with the Board of Trade Clearing Corp to offer clearing services for OTC power contracts in the US.
The credit problems in the energy sector following the collapse of Enron and the continuing difficulties faced by energy trading companies have increased the demand for clearing services in the industry. Ice chief executive Jeff Sprecher said the launch of UK natural gas clearing represents a further step in the exchange’s development of global OTC clearing services.