ICAP plc, an interdealer broker and provider of post trade risk and information services, Marex Spectron, which operates as a commodities broker, and Tullett Prebon, an interdealer broker, have launched Tankard, a series of trade-backed natural gas indices for UK and European hubs.
According to ICAP, the Tankard indices will initially cover four traded natural gas hubs in Europe - the UK National Balancing Point (NBP), Dutch Title Transfer Facility (TTF), German NetConnect Germany (NCG) and GASPOOL.
Each Tankard index is calculated exclusively using transaction prices for contracts for physical delivery at their respective hub, executed via one of the three brokers that comprise Tankard. ICAP, Marex Spectron, and Tullett Prebon provide coverage of the OTC natural gas market. In 2012, the three brokers arranged an estimated E450 billion notional value of physically settled natural gas forwards. Tankard plans to extend these indices to further hubs in due course, ICAP added.
Richard Frape, Director of Market Services at Marex Spectron, said: "Providing robust and transparent indices based on actual trades will go a long way towards increasing the level of transparency in the European natural gas market. This collaboration between the three largest brokers in the OTC market for European natural gas is likely to provide a sound foundation for related physical activity."
The trades that make up the Tankard indices are physically-settled natural gas forwards, executed between utilities, natural gas producers, hedge funds, banks and trading houses, the company concluded.