Singapore's SGX, Japan's TOCOM To Jointly Develop Asian LNG Market

Reuters

SINGAPORE, Nov 22 (Reuters) - Singapore Exchange (SGX) and Japan's Tokyo Commodity Exchange (TOCOM) said on Tuesday they have signed a memorandum of understanding to jointly develop Asia's liquefied natural gas (LNG) market, as well as electricity futures.

As part of the accord, the exchanges plan to explore opportunities like co-listing LNG derivatives, as well as synergies between the pair's market distribution networks.

SGX, which listed Asia's first electricity futures in 2015, will also share its experience with its Japanese counterpart, Loh Boon Chye, SGX's Chief Executive Officer, said in a statement.

"We also look forward to drawing on SGX's experience in electricity futures, as a liquid electricity market is closely linked to the development of the LNG market," said Takamichi Hamada, President and Chief Executive Officer of TOCOM.

SGX began pricing LNG in October 2015 when it launched its Singapore Sling index, assessing cargoes on a free-on-board Singapore basis. In September this year it launched a second index, the North Asia Sling.

The latter index, which will price the super-cooled fuel for the Japanese, South Korean, Taiwanese and Chinese markets, was seen by market participants as a signal that the market continues to take pricing signals from traditional buyers in North Asia.

Singapore, already Asia's main trading location for oil and refined fuel products, and Japan, the world's biggest consumer of LNG, had previously been in competition to establish Asia's main LNG hub.

The city-state of Singapore has so far been seen to lack a big enough consumer base to warrant a real trading hub, although investors and market participants appreciate Singapore's well established trading regulations, as well as the fact that English is its operating language.

On the other hand, Japan's status as the world's biggest consumer was seen by LNG producers as creating a market that was too importer-biased.

With the two now cooperating, these concerns may be addressed, making it harder for other aspirant trading hubs - including Seoul and Shanghai - to succeed.

(Reporting by Mark Tay; Additional reporting by Henning Gloystein; Editing by Himani Sarkar and Kenneth Maxwell)

Copyright 2016 Thomson Reuters. Click for Restrictions.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
QA/SQS Specialist
Expertise: QA / QC / Inspection
Location: North Slope, AK, United States, AK
 
Plant Foreman - Calumet, OK
Expertise: Facilities Management|Heavy Machinery Operator|Maintenance Technician
Location: Calumet, OK
 
Plant Mechanic - Garden City, TX
Expertise: Heavy Machinery Operator|Mechanical Technician
Location: Garden City, NY
 
search for more jobs

Brent Crude Oil : $53.89/BBL 1.67%
Light Crude Oil : $50.84/BBL 2.14%
Natural Gas : $3.7/MMBtu 2.77%
Updated in last 24 hours