Singapore Exchange (SGX) and Tullett Prebon have launched a liquefied natural gas (LNG) spot index for Dubai, Kuwait and India (DKI), a collaboration that seeks to enhance price discovery and risk management in one of the fastest-growing regions for LNG spot trading.
The DKI Sling offers a transparent and trusted reference price for LNG Delivered Ex-Ship under flexible terms to key ports in the three countries, complementing an increase in spot trading volumes.
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’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. The first print on 30 March was $5.421/mmBtu.
Michael Syn, Head of Derivatives at SGX, said: “We are pleased to collaborate with Tullett Prebon as we expand our suite of LNG indices beyond Asia. 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 markto-market trading exposure. SGX and the methodology behind the Sling indexes are already highly regarded by the industry, so we think this is the ideal partnership for establishing a credible regional price. This can subsequently be used as an underlying index in physical and financial trades.”
The DKI Sling is the third in the SGX LNG Index Group or Sling series of indices. It follows the Singapore Sling launched in October 2015, which serves as a reference point for the developing South-East Asian market, and the North Asia Sling introduced in September 2016, which delivers a much-needed representative price for the traditional centre of global LNG demand.
Source: SGX
