Benjamin Gibson joined Affinity (Shipping) in December from a commodity futures brokerage where he set up an LNG desk.

A former AP Moller-Maersk graduate trainee, Gibson cut his teeth on forward freight agreements (FFAs) at Clarksons where he was hired by then chief Richard Fulford-Smith, who founded and now heads up Affinity.

He has spent six months doing set-up work at his new company, where he is head of derivatives, and in July pulled off the first LNG freight derivatives trade between Total Gas & Power and Glencore.

What we need to happen is a period of bilateral OTC trading for these new FFA contracts to prove the concept so principals can see trades being done

Benjamin Gibson

Gibson says that typically the first movers on these types of contracts are the portfolio players and commodity houses because they can be both buyer and seller at any one time and are more used to benchmarking their freight exposure against financial contracts and indices in other markets.

Others in the mix

But he says there were others in the running to do this first trade, with more to come shortly.

“What we need to happen is a period of bilateral OTC trading for these new FFA contracts to prove the concept so principals can see trades being done,” he says.

Gibson says he is putting time and resources to trade these OTC deals against the Baltic Exchange routes so these can go live on an exchange as he is being told by clients that is what they want.

“As a broker, we are agnostic about what happens and will follow what our clients want,” he says.

He admits there could be room for innovators in the LNG FFA space, although it will take time for them to tick all the regulatory boxes ahead of an institution like the Baltic.

Gibson says the plan at Affinity has always been to develop side products. One of these is to give visibility to forward pricing on gas as a marine fuel, which is prompting a wealth of discussion at present.