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ENERGY & OFFSHORE, MARKETS & INVESTING | Staff Reporter, Singapore

SGX unveils LNG derivatives contract

It will be used as a spot price index for Asian LNG.

Singapore Exchange (SGX) has launched its new LNG derivatives contracts, in a bid to solidify the city-state’s position as an energy trading hub.

Known as the SGX SLInG LNG derivatives, the SGX seeks to adress ongoing market developments where the dynamics of price formation and risk management in the LNG market are becoming increasingly important.

This is on the back of an onslaught of new supply capacity, softer demand from several traditional buyers, rising short-term spot sales and less predictable trade flows.

SLIng is shorthand for FOB Singapore SGX LNG Index Group, a spot price index for Asian LNG. It is designed to assess prices in the heart of several major origin (FOB) and destination (DES) locations.

SLInG is a transparent index based on contributions from 20 major physical participants, including a balanced mix of buyers, sellers and traders.

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