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Anew source of pressure in Asian LNG pricing dynamics has emerged with the mid-September launch of an over-the-counter (OTC) LNG exchange in Japan, Qatar’s largest LNG buyer.
The Japan OTC Exchange (JOE), the country’s first LNG trading exchange, began non-deliverable LNG forward trading on 12 September – just a day after receiving approval from Japan’s Ministry of Economy, Trade and Industry (METI).
JOE is a joint venture between the Tokyo Commodity Exchange (TOCOM) and a subsidiary of Singapore-based Ginga Petroleum.
While it is unclear at this stage how much LNG will be traded on the exchange and how much of an impact JOE will have on Japan’s LNG market, METI surely hopes that the exchange will put downward pressure on the price paid for LNG in Japan. TOCOM views JOE as a first step as the country prepares for deregulation of retail electricity in 2016; in a presentation this summer, it said that its next stage will feature LNG futures trading on TOCOM itself.
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