Singapore Immigration focuses on Singapore Immigration Economy: Singapore plans to establish a domestic natural gas trading market to support its goal of becoming a liquefied natural gas (LNG) trading hub and to seize the opportunities presented by the rise of LNG in the Asian energy market.
Having already become a global oil trading center, Singapore is planning to capitalize on the increase in LNG supply from the region, particularly from Australia, as well as the growing number of buyers in Asia, especially in China and India. Over 90% of Singapore's electricity is generated from imported natural gas, including LNG, but natural gas users currently purchase gas through bilateral agreements.
On Monday, during the opening of Singapore International Energy Week, Minister of State for Trade and Industry Koh Poh Koon stated, "The domestic natural gas market will help reflect local supply and demand conditions through price discovery."
Singapore is at the center of the Asian LNG trade route, with Asian LNG consumption accounting for about 70% of global supply. Although pricing agencies like Platts publish Asian LNG prices, there is currently no authoritative LNG benchmark. In fact, most LNG contracts are priced based on a combination of oil prices, estimates from pricing agencies, and some regional contracts—such as the UK's National Balancing Point (NBP) and the United States' Henry Hub.
Last week, the Singapore Exchange (SGX) told Reuters that it plans to create an Asian LNG benchmark to break the long-standing oil-linked pricing model. Singapore is competing with Japan for the position of the Asian LNG trading center. Japan is the largest LNG importer in Asia and is preparing to fully liberalize its domestic electricity market starting next year.
China is also importing LNG through pipelines in large quantities, with both the number of LNG import terminals and domestic LNG production continuing to grow, making it a potential competitor for a natural gas trading center, although China's development in this area is still in its early stages.
Koh did not provide a specific timeline for the initiative but stated that the government is seeking industry feedback. He indicated that Singapore also plans to enhance competition in the domestic electricity market.