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Temasek's Pavilion Energy to use Singapore LNG price index for trades in next few years

TEMASEK-BACKED Pavilion Energy is throwing its weight behind a newly-formed Singapore price index for liquefied natural gas (LNG).

The LNG company said on Tuesday that it is looking for industry stakeholders, and in particular market maker traders, to become comfortable with the Singapore LNG index Group (SLinG) and consider placing trades using it.

The weekly index is based on the averaged submissions from international LNG players who offer their fair assessment of LNG cargo prices at a virtual point off Singapore, at specified times in the future. Nearly 20 players are on board the SLinG, up from 13 when it was first unveiled in June this year.

The Singapore Exchange is in the process of launching a SLinG swap product, said Pavilion Energy CEO Seah Moon Ming. "Once this is ready, Pavilion Gas (a subsidiary of Pavilion Energy) will be keen to explore with interested counter-parties, both gas producers and/or buyers, on transacting cargoes on SLinG, within the next one to two years."

Mr Seah, who was making a keynote speech at Gastech, also announced a 10-year sales and purchase agreement with Russia's Gazprom Marketing and Trading. "We continue to strengthen our overall LNG supply portfolio to add to the company's diversity, including price indexation," he said.

The firm has also signed two memorandums of understanding (MOUs) with with large Asian LNG players. Under these agreements, it will supply LNG cargoes to Huadian - one of the five largest state-owned power generation companies in China - from 2020 onwards, and also collaborate with Japan's JERA - a joint venture between the world's second and third largest LNG buyers Tokyo Electric Power Co (Tepco) and Chubu Electric Power - in joint LNG procurement and investment.