Singapore Exchange to Open LNG Index
Singapore Exchange (SGX) is developing a spot pricing index for the Middle East and India liquefied natural gas markets (LNG) in collaboration with inter-dealer broker Tullett Prebon, says WSJ.
The index is aimed at market participants who are forced to rely on tenders for setting up prices due to the lack of an accepted price marker.
The deal is aimed at boosting Singapore's status as a key LNG hub providing storage, trading, shipping and price discovery activities.
The new index aims to provide a credible, consistent and transparent pricing mechanism, as the volume of LNG trades in the region continues to rise. It could also serve as a first step towards standardising LNG trade in the region.
The exchange has already launched a spot price index for Asian LNG, known as Singapore SLInG. It has also signed a memorandum of understanding with Japan’s Tokyo Commodity Exchange (TOCOM) to explore potential cooperation on derivative products.
Major exchanges around the world are eyeing the rapid growth of the LNG market. SGX is known to be one of the world’s most liquid offshore market for the benchmark equity indices of China, India, Japan and the Association of Southeast Asian Nations.