AsiaOne: Singapore LNG Index Can be Asia Benchmark in a Year or Two: SGX

The next one to two years presents "a clear window" for the Singapore liquefied natural gas (LNG) price index to be accepted as the Asian benchmark, said the Singapore Exchange on Thursday, as it outlined the next phases expected in its development.

It said in a report that the liquid LNG spot market in Asia would take time to evolve, but that many of the crucial elements were already emerging; these included a shift towards shorter-term contracts, a move away from oil indexation, removal of destination restrictions on cargoes and increased flexibility of gas specification at destination.

David Carlson, an SGX senior business development manager, and members of its commodities team Cheong Jin Yu and Adrian Lunt wrote: "The development of Sling (Singapore LNG Index Group) as a true gas price for LNG in Asia has been timely and there is a clear window over the next one to two years for it to gather acceptance and become the reference price for spot and hedge trade in the Asia-Pacific. MORE