Tullett Prebon, one of the world’s leading interdealer brokers, and the Singapore Exchange (SGX) have launched a spot pricing index for the Indian and Middle East liquefied natural gas (LNG) markets to provide a credible, consistent and transparent pricing mechanism. The new index seeks to enhance price discovery and risk management in the region. The SGX LNG Index Group, or the DKI (Dubai, Kuwait and India) Sling, will provide a transparent and trusted reference price for LNG Delivered Ex—Ship under flexible terms to key ports in the three countries.
First introduced in January for launch during the second quarter, it provides an independent physical price marker as the industry moves away from oil-linked pricing and towards gas-on-gas pricing, SGX said in a statement. SGX’s wholly owned subsidiary, Energy Market Company (EMC), as the index administrator, will publish the DKI Sling every Monday and Thursday. The new index was developed with London-based Tullett Prebon, one of the world’s largest brokers of physical LNG cargoes.
Michael Syn, Head of Derivatives at SGX, said, “The DKI Sling aims to improve benchmarking and risk management in the Middle East and India region, meeting the specific needs of the physical LNG market as it evolves.” Melissa Lindsay, Global Head of LNG at Tullett Prebon, said, “We see the development of a trusted and transparent price for the Middle East and India region crucial in helping LNG participants mark-to-market trading exposure.”