FUTURES & SWAPS > LPG
Liquified Petroleum Gas
LPG, also known as Liquefied Petroleum Gas, is a gas under normal temperature and pressure. LPG’s main components are Propane (C3H8) and Butane (C4H10) which occur naturally in crude or from refining processes such as crude distillation, catalytic reforming or hydrocracking. LPG is liquefied by reducing temperature or increasing pressure for ease of transportation and storage.
Commonly used for recreational and leisure applications, such as central heating, air-conditioning and refrigeration, LPG is also used in the industrial production and manufacture of ferrous and non-ferrous metals, gas and chemicals, glass and vehicles. Because of its mobility, LPG is more versatile than natural gas and can also be used in other areas such as agriculture and as fuel.
Ginga provides Over-The-Counter (OTC) broking services for LPG.
In June 2004, Ginga launched a new trading contract, called the LPG Far East Forward Contract. This contract enables the forward delivery of physical tonnage. The key contract details are as follows:
|PRODUCTS||Refrigerated Propane and Butane|
|Contract Size||23,000t of Propane (+/- 5pc) or 11,500t Propane/ 11,500t Butane (+/- 5pc)|
|Pricing||In US$/per Metric Ton|
|Delivery||CFR, either first half month or second half month|
|Origin||Propane & Butane : Algeria (Bethioua), Australia (Kwinana, Port Bonython, Port Dampier, Westernport), Bahrain (Sitra), East Timor (Bayu Undan), Indonesia (Bontang), Kuwait (Mina Al-Ahmadi), Malaysia (Tanjung Sulong), Nigeria (Bonny River), Norway (Kaarstoe), Qatar (Mesaieed, Ras Laffan), Saudi Arabia (Ras Tanura, Ju’Aymah, Yanbu), and/or U.A.E. (Das Island, Hamriyah, Jebel Ali, Ruwais), U.S.A (Enterprise Houston)
* For above Algeria (Bethioua), Malaysia (Tanjung Sulong) & U.S.A (Enterprise Houston) for Propane only.
|Specifications||Original supplier’s guaranteed specifications|
The three basic categories of trading LPG are:
|Forward||This is defined as a standardized contract used to sell and buy in the future at an agreed price today. A forward contract can be used for physical transactions or as a financial instrument without physical delivery.|
|Physical||This is defined for physical transactions with conditions different than LPG Far East Forward Contract. For a Physical deal, Seller and Buyer agree on conditions customized for each deal particularly.|
|Paper Swaps||A paper swap is an agreement to settle in cash the difference between the fixed price of a derivative now and its floating price at a future period. There is no physical delivery.|