Glencore, Socar Execute LNG Freight Swap

British–Swiss Glencore and Azeri state-run Socar Trading have executed the first freight swap against Spark Commodities’ Spark25 Pacific based assessment in a bilateral trade arranged by Affinity Financial Products, Kpler announced September 30.

Spark Commodities is a joint venture between Kpler and Powernext, (part of EEX Group which belongs to Deutsche Borse), focused on providing technology based solutions that promote liquidity in the LNG market.

The Spark25 contract, assessed by leading, active LNG shipbrokers, provides a time charter equivalent for spot vessels delivered in the Pacific based on a route between NorthWest Shelf, Australia and Tianjin, China.

Affinity's head of LNG Derivatives Benjamin Gibson said his company was "very pleased d to be able to support the market’s appetite for testing different LNG freight benchmarks." The trade was concluded over-the-counter (OTC) and executed bilaterally using a long form contract.

LNG traders Jera Global Markets (JGM) and Swiss-registered Vitol executed the first Atlantic LNG freight swap against the Baltic Exchange's BLNG3 assessment in a bilateral trade arranged by Affinity Financial Products, the four parties involved said September 25. That also depends on an assessment from a pool of experts. Optimising shipping rates is a key part of keeping commodity prices down.