Interdealer broker Tullett Prebon has teamed up with Singapore Exchange (SGX) to develop a spot pricing index for the Middle East and Indian liquefied natural gas (LNG) markets.
Due to be launched in the second quarter of this year, the new index is expected to provide a reference price for LNG delivery to key ports in Dubai, Kuwait and India (DKI).
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.
Melissa Lindsay, global head of LNG at Tullett Prebon, said: “Over recent years we have seen an increase in the volume of spot trade into the Middle East and India region and this new index will provide better price discovery and fair value to our clients. Over time there will be moments where the regional price decouples from the Far East LNG or European gas prices, so it is important for an independent and trusted regional price.”
The deal is aimed at boosting Singapore's status as a key LNG hub providing storage, trading, shipping and price discovery activities. 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.
In August last year, Singapore Exchange agreed a £77.6m takeover deal for the London-based Baltic Exchange after months of discussion. The offer stood at £160.41 per share and Baltic shareholders were promised at least £18.80 in cash as a final dividend.
At the time, Baltic said it agreed a deal with SGX because of its intention to keep its UK headquarters.