‘Let’s get physical!’: Abaxx takes on JKM

Abaxx Exchange wants to do what no one has managed in modern LNG trading: turn a paper price into a physical one.

For more than a decade, the Asian LNG spot market has been anchored by the Japan-Korea Marker, a Platts-assessed cash price built from bids, offers and trades reported by a small club of big players.

JKM prices billions in LNG trade each month, yet no cargo has ever passed through its clearing mechanism — because it doesn’t have one.

Now, a group of former traders and risk specialists believes it has built something better: an exchange-traded benchmark overseen by a dedicated clearinghouse that links futures prices to real cargo delivery, rather than to assessed market quotes.

The stakes are enormous. Success would redirect order flow worth hundreds of millions and redefine how LNG is priced across the world’s fastest-growing energy markets. Failure would confirm the sceptics’ view that physical settlement is an elegant theory unsuited to a seaborne commodity.

“The bottom line is LNG is a severely opaque market, and many like it that way.”

Abaxx’s proposition is straightforward but audacious: a futures contract that guarantees not just a price, but an actual shipload of gas.

To its advocates, that promise could finally align paper and physical markets, de-risk spot trade, and bring greater transparency to a system that many view as opaque. To its critics, it’s an operational nightmare that would swap counterparty risk for delivery frictions that cash settlement avoids.

With short-term and spot trades accounting for an increasing share of overall LNG supply, the battle for supremacy in global LNG pricing is heating up. This isn’t an arcane debate about settlement mechanics; it’s a fight over who gets to define the value of a fuel that powers half the world’s economies.