EMEA News
LNG Spot Index Set to Launch on Singapore Exchange
Tullett Prebon has announced that, along with the Singapore Exchange (SGX), it is developing a spot pricing index for the Middle East and India's liquefied natural gas (LNG) markets.
The new index, which is set to launch in this year's second quarter, is said to be intended to enhance the region's price discovery and risk management, and will provide a transparent and reliable reference price for LNG Delivered Ex-Ship to major ports in Dubai, Kuwait, and India.
"As the LNG market moves towards an oversupply, the role and relevance of spot and shorter-term contracts has increased. However, the industry still lacks transparency and credible price references. The Middle East and India region in particular has seen a boost in spot trade, but lacks an accepted price marker and market participants are often relying on tenders for price discovery," explained Tullett Prebon.
"Those hedging physical exposures have limited options, and are using Far East LNG and/or UK oil and gas benchmarks to manage risk."
The company says the new index could also mark the first step toward standardising LNG trade in the region.
"It is encouraging to see Singapore Exchange extending its service offerings in the LNG space. As LNG markets become more spot-based, this strategic partnership between SGX and Tullett Prebon will pave the way towards more transparent, trusted and reliable price discovery benchmarks," said Amreeta Eng, Group Director for Trade Promotion at International Enterprise Singapore.
"Singapore is emerging as a key LNG hub, with storage, trading, shipping and price discovery activities, and we look forward to more industry-led initiatives to develop the LNG markets."
