The Baltic Exchange is aiming to officially launch three LNG shipping indices this year as seaborne trade volume of the super-chilled fuel continues to expand.
In an event held by the London-based index provider, chief executive Mark Jackson said the Baltic would seek to bring the BLNG1 Gladstone-Tokyo index—which has been published on a public trial basis since last July—online next month.
“In March we plan to launch the first LNG index,” Jackson said. “We hope that will be the first of three.”
The Baltic has also aimed to start the private trial for the BLNG2 index, which assesses the Sabine Pass-Isle of Grain route, in April before entering the public trial in June and formally launching it in September.
It has targeted to launch the private trial for the BLNG3 Sabine Pass-Tokyo assessment in March. If the index progresses well, a public trial will start in May before the BLNG3 becomes a live index in August.
All the indices are based on a round-voyage basis for a 160,000-cbm tri-fuel diesel-electric LNG carrier, cold and ready to load.
“There seems to be good feedbacks from the markets,” Baltic Exchange’s senior freight reporter James Pendered said.
Seaborne LNG trade volume has continued to grow at a rapid pace, with rising US, Australian exports as well as healthy demand growths in China and some emerging economies.
According to Clarksons estimates, global seaborne LNG trade is to reach 346 million tonnes in 2019, up 8% from the 2018 level of 319 million tonnes.
Separately, Jackson has expressed worries over the regulatory uncertainties arising from the UK’s impending departure from the European Union.
Based on Europe’s Markets in Financial Instruments II rules, benchmark administrators like the Baltic need to obtain approvals within 2019.
The Baltic has applied to register under the UK Financial Conduct Authority as a regulated benchmark administrator. The approval could become invalid in the EU if the UK leaves the trading bloc without a deal.
If the Baltic can obtain the approval while the EU rules are still being enforced in the UK, there might be a better chance that the approval will remain valid in European nations after Brexit, according to Jackson.
“We really hope this process can be completed before the Brexit…Otherwise we may need to reapply again,” Jackson said.
