Nadia Mirza talks LNG and LPG
The Baltic’s lead on New Markets provides an update on the Baltic Exchange’s gas activity and how she came to the role.
The journey through shipping has been one with plenty of twists and turns for Nadia Mirza. Over a 20-year career, the Baltic’s lead on New Markets has worked in container and dry bulk shipping in London, Singapore and Hong Kong. There was also a spell in Rome with the UN World Food Programme thrown in for good measure.
Today, based in London, Nadia is responsible for developing the Baltic’s recent move into containers and gas. The Baltic publishes three LNG assessments and has just announced trials of two new LPG routes. Rising to the challenge of the gas markets is a key remit for Nadia.
She says:
“I’ve found learning about the gas markets really fascinating. I have been lucky enough to sit with some great people in the industry and be fully primed. It’s a fast-growing market and one which is seeing changes to the way it manages its risk.”
Focus on LNG
Over the past 12 months London FFA brokers in particular have been extremely active, opening LNG futures desks. SSY, Clarksons, Affinity and Braemar are all offering clients LNG FFA services. The first swap was announced between Total and Glencore in July 2019, brokered by Affinity and settled against BLNG1 (Gladstone to Tokyo).
Now the push is on to develop a liquid cleared market for LNG. In December clearing house CME was the first to launch contracts based on the Baltic LNG assessments. She notes that the listing has led to a lot of test trades going on, especially on BLNG2 (Sabine to Europe).
“There’s been a lot of interest focused on this route, primarily because a lot of the authority for LNG globally is based out of London, and the Atlantic is mainly what they cover out here.”

Wider themes impacting LNG
Nadia notes that there has certainly been a lot of buzz around LNG due largely to the need for industrial decarbonisation. LNG, although still a fossil fuel, is clean. It emits virtually no sulphur or nitrogen when burnt and has a lower carbon footprint than other energy sources such as coal and oil. As such it is seen as step towards a zero-carbon world. For the shipping industry, LNG is both a cargo and a fuel.
“We are seeing a lot more dual-fuel ships capable of being powered by LNG and traditional compliant fuel. This is certainly the case in the container markets. I think this is because these ships are on the frontline: they’re moving finished goods, so they’re feeling consumer pressure to reduce their environmental impact first-hand.”
The glut of low-priced LNG has of course been an important spur for take-up and Nadia acknowledges that in the short term, cheap oil may negate the move towards LNG. However, she thinks that LNG’s environmental credentials underpin its future.
“There is an overall move toward LNG as an option due to its long-term impact on shipping emissions.”
Looking at LPG
LNG isn’t the only gas game in town. The boom in shale gas extraction has increased the supply of Liquified Petroleum Gas (LPG) which is used in a range of applications in business, industry, transportation, farming, power generation, cooking and heating. In the competition for shipping’s best alternative to high sulphur fuel oil, LPG has seen increased interest due to its ready availability globally, clean qualities and affordability. LPG is also less challenging to handle since it has a higher boiling point and, unlike LNG, is not stored at cryogenic temperatures.
The Baltic is already running one LPG route, BLPG1, Middle East Gulf to Japan. Plans to expand this are in the pipeline, with two new routes currently being trialled, BLPG2 (Houston to Flushing) and BLPG3 (Houston to Chiba (Japan) via Panama). Both the BLPG2 and BLPG3 have been on Private Trial since 12 February 2020 and commenced Public Trial reporting on 1 April 2020. Once established, these new routes could open the door to a derivatives market for this segment.
Supporting the entire market is confidence in the underlying assessments. Thanks to the Baltic’s recent authorisation as a Benchmark Administrator by the UK’s Financial Conduct Authority (FCA), users of the Baltic’s gas assessments are assured of the Baltic’s strong governance, robust benchmark design, transparent methodologies and clear accountability. The Baltic Exchange is the only provider of freight assessments with this status.
Next steps
The Baltic will continue to support the market not only with reliable assessments, but also through engagement with companies. With the world currently in Covid-19 lockdown, the planned series of face-to-face round table talks and conference presentations are clearly on hold. Educating potential market participants is a critical part of the Baltic’s role. But according to Nadia, this won’t hold her back.
“We want to continue to grow our understanding of what is needed from the Baltic Exchange. What people in the room can learn from each other. Our aim is to gauge from the market how they’re doing and what the barriers are for them to actually be participating in the market.”
The Baltic LNG Index is published Tuesdays and Fridays.
BLNG1 | Gladstone to Tokyo RV |
BLNG2 | Sabine to UK/Cont RV |
BLNG3 | Sabine to Tokyo RV |
A daily LPG assessment (Middle East Gulf to Japan) is published at 1600 (UK), with two further routes (Houston to Flushing and Houston to China via Panama) currently on trial.