SGX Plans New LNG Pricing Index: Correction

(Explains relationship between SGX and Energy Market Company, para 4.)

Leading energy broker Tullett Prebon and Singapore Exchange (SGX) said January 23 they will jointly develop a spot pricing index for the Middle East and Indian LNG markets.

Following industry consultation, they say their new index will provide a reference price for LNG delivered ex-ship under flexible terms to key ports in Dubai, Kuwait and India. Launch of this new ‘DKI Sling Index’ is “expected 2Q2017” and would be published every Monday and Thursday by SGX.

As the LNG market moves towards greater oversupply, a credible price reference for Middle East/India will become more relevant to its growing spot LNG trade and could serve as a first step towards standardising LNG trade in the region, argue SGX and London-based Tullett Prebon.

SGX and wholly owned subsidiary Energy Market Company helped launch the ‘Sling’ spot LNG pricing index for Singapore, and a subsequent North Asian variant too.

But many in Middle East/India still opt to price spot cargoes off more established and liquid indices such as US Henry Hub or the UK’s National Balancing Point (NBP). For those that don't, price reporting agencies already provide some disclosure of the Middle East and Indian spot LNG prices.

Most long-term contracts in Asia remain oil-indexed but many buyers there are keen for more hub indexation when they renegotiate their contracts. 

Mark Smedley