Tocom plans LNG futures exchange with help from CME - Nikkei
Nov 29 (Reuters) - The Tokyo Commodity Exchange (Tocom) is in talks with CME Group Inc to create the world's first exchange for liquefied natural gas (LNG) futures, the Nikkei reported, citing sources.
Tocom and the operator of the Chicago Mercantile Exchange, which will help the Japanese exchange design the new futures market for easy participation by overseas investors, are aiming to reach an agreement by the end of the year, the Nikkei said.
Japan's trade ministry said in March the country plans to launch the LNG futures exchange by March 2015 to help cut its import costs by breaking its reliance on oil-linked pricing.
The top LNG buyer aims to establish a cash-settled LNG futures market at Tocom to give importers, including power utilities and city-gas suppliers, a chance to hedge risks.
The exchange would be designed in a trading framework under which American banks and hedge funds can directly place orders on Tocom, the Nikkei said.
Tocom plans to spend tens of millions of yen to configure a system, and roughly 100 of CME's largest customers are expected to sign up, the business daily said.
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