Janice Kan, SGX
London, Singapore - Tullett Prebon is collaborating with Singapore Exchange (SGX) to develop a spot pricing index for the Middle East and Indian liquefied natural gas markets (LNG) to enhance price discovery and risk management in the region. Following industry consultation, the new index will provide a reference price for LNG Delivered Ex-Ship under flexible terms to key ports in Dubai, Kuwait and India (DKI).
The new DKI Sling Index will be published every Monday and Thursday by SGX. 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 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.
Janice Kan, Head of Commodities at SGX, said: "Singapore Exchange is pleased to collaborate with Tullett Prebon to introduce the new Dubai-Kuwait-India Sling index. The winning combination of Tullett Prebon's extensive network and deep understanding of the LNG market, along with SGX's transparent and trusted methodology, will help the new index to develop as a benchmark for the region. We look forward to continue building industry support to enhance price discovery in the LNG market."
The DKI Index will form part of the SGX LNG Index Group or 'Sling' series of indexes that uses methodology of collecting an average price from participants.