| Originating department: | Commercial Services |
| Company Circular No: | LCH.Clearnet Ltd Circular No 2280 |
| Service Circular No: | LCH EnClear No 206 |
| Date: | 27 March 2008 |
| To: | All LCH EnClear Clearing Members |
Re-launch of Clearing Services for Natural Gas NBP Contracts
Further to LCH.Clearnet Circular No 2248, EnClear No 196 dated 30 January 2008, LCH.Clearnet is pleased to announce the re-launch of its clearing service for Natural Gas NBP Contracts. These contracts are an extension of the existing LCH.Clearnet Enclear Energy Services and will go live in their new format on Friday 18th April 2008.
In addition to changes to the underlying EnClear agreements for gas and power, LCH.Clearnet has changed the expiry day of the Natural Gas NBP contract from 3 business days prior to the first day of the delivery month to 2 days prior. These changes are highlighted in the Natural Gas NBP contract terms below.
The Natural Gas NBP contracts will be cleared using the ECS system.
The margin rates for these contracts can be found on the following section of the LCH.Clearnet website http://www.lchclearnet.com/margin_rates.asp.
The first tradeable contract month will be August 2008.
Natural Gas NBP Contract Terms
| Description | Physically settled forward contract for the delivery of NBP UK natural gas. |
| Lot Size | One lot is equal to 1000 therms per day. |
| Minimum Contract Size | One lot. |
| Currency | Pounds sterling (£) |
| Minimum Tick Size | One pence per therm, 0.01p/therm |
| Settlement Price | The settlement price will be determined by LCH.Clearnet using assessments from independent price reporters. |
| Trading Day | ECS will be open for trade registration between 08:00 and 17:00. |
| Contract Series | 12 months, 8 quarters, 6 seasons, 2 years (gas years and calendars). |
| Expiry Day | Contracts will expire at 17:00 two business days prior to the first day of the delivery month. |
| Delivery | Delivery is at the National Balancing Point (NBP) by way of acquiring and disposing trade nominations between delivery counterparties and LCH.Clearnet. |
Fees
LCH.Clearnet will collect clearing fees from Clearing Members, and these will be included in month end fee invoices.
| Registration Fee | 0.0015 pence per therm |
| Delivery Fee | 0.002 pence per therm |
ECS Contract Codes
| Contract | Contract Code |
| NBP UK Natural Gas Contract | UNF |
Clearing Member Participation
Clearing of Natural Gas NBP contracts is open to any LCH EnClear Clearing Member approved by the Clearing House to clear trades originating from an Approved OTC Gas and Power Broker. Those clearing members who are currently not so approved and who wish to participate in clearing should contact the LCH.Clearnet Ltd Membership department.
Contact: Membership@lchclearnet.com or +44 (0)20 7426 7891/7627
Miscellaneous
Questions relating to the topics covered in this circular should be directed to the following:
| General | Isabella Kurek-Smith | +44 (0)207 426 7460 |
| General | Jason LaBrooy | +44 (0)207 426 6323 |
| Membership and Training | Dee Kalsi | +44 (0)207 426 7891 |
| Risk | Matthew Wade | +44 (0)207 426 7659 |
| Operational | Kevin Watts | +44 (0)207 426 7699 |
Yours sincerely,
Isabella Kurek-Smith
Head of Energy and Freight Markets
Commercial Services