CTRM software house of the year: Ion Commodities

Energy Risk Awards 2022: Software firm launches raft of products for navigating energy transition

As energy and commodity firms adapt to the global energy transition, they require tools that will help them expand their businesses into new markets, ensure compliance with climate-related regulations and mitigate the risks and volatility of rapidly changing markets.

In 2021, Ion Commodities introduced 15 major new product offerings for businesses navigating both the energy transition and evolving markets. These new solutions include trade and risk management for the liquefaction and regasification of liquefied natural gas (LNG), predictive pathing using machine learning for natural gas, tools for managing power purchase agreements (PPAs), and trade and risk management for carbon credits, emissions offsets and renewable certificates.

“As the world focuses on reducing greenhouse gas emissions, we are supporting our customers in their energy transition journey and enabling participation in global and regional markets through [our] active product innovation,” says Sunil Biswas, chief product officer at Ion Commodities. “Some 50% of our workforce is dedicated to research and development,” he adds.

In 2021, Ion Commodities launched its Carbon Markets solution, which manages the complete trade lifecycle of certificates including renewable fuels, green power and carbon certificates. The product’s configurable workflow offers real-time valuation, liquidity risk profiling and settlement capabilities for these environmental certificates.

Innovations such as the Carbon Markets solution are driven from Ion Commodities’ continuous collaboration with its community. Through ‘ConnectION’, Ion Commodities’ customer engagement platform, the firm confers with industry leaders to identify business needs and collect feedback.

“ConnectION allows us to exchange ideas and best practices, discuss industry trends and tackle critical topics, such as market standardisation and energy transition, with our community of 30,000 users,” says Biswas.

Some 50% of our workforce is dedicated to research and development

Sunil Biswas, Ion Commodities

Last year, Ion Commodities and a working group of industry professionals developed new product capabilities to address the complexity and pay-out structure of PPA contracts while considering a series of parameters including time series, pricing formula, rules, cap, floor and penalties.

In 2021, Ion Commodities also launched Cargo Decision Analyser for the LNG market. As LNG becomes more important to the global energy fuel mix, businesses require greater flexibility for their shipping routes and delivery options. With Cargo Decision Analyser, traders and schedulers can optimise shipping decisions by evaluating available options based on existing contracts and map them against real-world constraints and schedules.

“Ion Commodities’ Cargo Decision Analyser allows market participants to understand complex optionality in contracts while providing insights into risk. [It] improves users’ decisions on asset utilisation to maximise profits,” says Biswas.

Last year, Ion Commodities onboarded a gasification terminal and natural gas pipeline network operator in Texas, one of the largest software deals in the LNG industry to date, according to Ion. The business chose Ion Commodities to help fulfil its ambition to become the premier LNG exporter in North America, bringing gas from Texas to global markets. For this, the firm needs technology capable of managing both physical and financial assets and handling the complexities of operating across the natural gas and LNG value chain. Ion Commodities provides the business with tools for determining effective hedging strategies, mitigating risks across the value chain, and optimising assets with what-if scenario analysis.

In today’s challenging commodity markets, where margins are thin, markets are complex and volatility can wipe out profits in an instant, it is vital firms have real-time visibility into their positions and risk.

“Ion Commodities is on a mission to help firms unlock business insights from the data generated across their ecosystems,” says Biswas. “There’s an ever-increasing need for greater visibility into positions, exposures and a need for more real-time data to deliver intraday position and risk reporting,” he adds.

In Ion Commodities’ most recent annual customer survey, respondents observed up to a 3% reduction of their annual operating costs due to improved visibility into market positions achieved by using Ion’s commodities management solutions.