The Dubai Multi Commodities Centre (DMCC) is planning to launch a liquefied natural gas futures contract on its exchange soon.

An LNG contract could help invigorate spot trade in the product, which is now sold primarily on the basis of decades-long contracts, and would aid efforts to arbitrage cargoes between Asia and Europe and the United States, where pipeline gas futures contracts are already actively traded.

"We will be looking to start the LNG futures contract reasonably soon," David Rutledge told Reuters during a visit to Singapore this week. "With a storage hub in place, we are in good shape to launch that contract."    

DMCC, along with LNG Impel, is setting up a 40 to 65 billion cubic feet LNG storage facility at a cost of about $2 billion to offer customers the ability to store and trade the product.

He declined to give the exact schedule for the launch of the futures contract on the Dubai Gold and Commodities Exchange, in which DMCC holds a majority stake.

The DMCC, backed by the Dubai government, has met some success with its steel futures contract but efforts to launch a fuel oil contract a year ago floundered.

The DMCC said earlier this month it would launch a plastics contract in January as high energy prices encourage designers to make buildings, cars and aircraft as energy-efficient as possible, increasing demand for light materials such as plastics.

"We are doing quite a lot on the energy infrastructure side in the region. The consequence of that would be that the exchange will have a wide portfolio of energy products. We have mentioned gasoline previously."    

The exchange is based in the commercial hub of the world's top oil-exporting region, which according to the Gulf Petrochemicals and Chemicals Association has half the world's petrochemical projects.

DMCC said on Monday it was extending its Dubai Commodity Receipt, an electronic warehouse receipt model, to Singapore, Malaysia and South Korea.

The Global Multi Commodities Receipts will allow businesses to access lines of credit against their inventories by pledging them in favour of member banks.  -Reuters