Enymex Basis Swaps to Be Based on NGI Indexes
Two basis swap contracts based on NGI's bidweek indexes at Chicago and the Southern California border were among a number of energy products approved yesterday for listing on enymex, the New York Mercantile Exchange's Internet-based trading system. Nymex expects to launch the new system during the second quarter of 2001.
"These products were designed to replicate the most actively traded over-the-counter energy instruments," said Exchange Chairman Daniel Rappaport, "introducing the added benefits of clearing services; a neutral, centralized marketplace; and a highly sophisticated technological platform. While there may be additional products developed for introduction at launch, including more internationally based contracts, and there will certainly be more shortly thereafter, these contracts were selected as natural adjuncts to our established markets because of their close relationships to these liquid benchmarks."
Two of the products are basis swap contracts based on the differential between the exchange Henry Hub natural gas futures price and the Natural Gas Intelligence quoted index prices for Chicago City Gate and the Southern California border. Terms of the new instruments include the following:
- Trading will terminate on the last business day prior to the contract month.
- There will be financial delivery based on the bid week price quoted for both spot points in the Natural Gas Intelligence Bidweek survey minus the final settlement price of the exchange Henry Hub natural gas futures contract for the corresponding month.
- The minimum price fluctuation for both Chicago and SoCal border contracts will be $0.001/MMBtu.
Enymex also will list a number of other products, including a West Texas Intermediate crude oil calendar swap contract; a Henry Hub natural gas swap contract based on the final settlement price for the exchange's futures contract; basis swap contracts based on the differential between the final settlement price for the Henry Hub natural gas futures contract and Inside FERC's Gas Market Report quoted indexes for Henry Hub; El Paso San Juan Basin; Houston Ship Channel; and Transco Zone 6; basis swap contracts based on the differential between the exchange Henry Hub natural gas futures contract and the Canadian Gas Price Reporter Alberta spot month price (based on AECO C/NIT); and several other crude and heating oil products.
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