With the U.S. about to become a net exporter of natural gas for the first time in 60 years, Intercontinental Exchange Inc. (ICE) said March 22 it would begin trading the first-ever U.S. LNG futures contract in May.

ICE said the contracts would be cash-settled against the Platts LNG Gulf Coast Marker (GCM) price assessment and use Platts-derived U.S. GCM LNG forward curves for daily settlement purposes. The curves will have an initial term of 48 months.

"Domestic and international market participants now have a risk-management solution that lays the foundation for a more effective means of hedging their spot and forward exposure," J.C. Kneale, ICE's vice president of North American power and natural gas markets, said in a statement.

U.S. gas producers, plagued by low domestic prices in recent years, are eager to sell into the international marketplace through LNG. Growing LNG exports are propelling the U.S.' transition to a net exporter of natural gas, which is expected to happen later this year or in 2018.

The last time the U.S. was a net exporter of gas on an annual basis was in 1957. The country started exporting gas from the Lower 48 in February 2016, when the first vessel left Cheniere Energy Inc.'s (NYSE: LNG) Sabine Pass export terminal in Louisiana.

Five other U.S. LNG export facilities are currently under construction by units of Cheniere, Kinder Morgan Inc. (NYSE: KMI), Sempra Energy (NYSE: SRE), Dominion Resources Inc. (NYSE: D) and Freeport LNG Development LP. The companies expect them to enter service by the end of 2019.

With growth in LNG export capacity, the U.S. will become the third-largest exporter of LNG by the end of 2020, according to S&P Global Platts, which provides the price assessment for the ICE contract.

"We believe the U.S. Gulf Coast is poised to become a key anchor for LNG prices,” said Shelley Kerr, S&P Global Platts' global director of LNG.

Kerr said growth in Asia-based LNG swaps has already been strong, and now "counterparties are demanding that the new flexible supply from the U.S. is underpinned by both price transparency and the means to hedge."

The benchmark natural gas contract in the U.S. is the Henry Hub contract traded on the CME Group Inc.'s New York Mercantile Exchange (NYMEX), which competes with ICE. ICE also has contracts tied to the Henry Hub.

The average volume in Henry Hub futures on the NYMEX has averaged about 400,000 contracts per day over the past 200 days, according to Reuters data.