my comment from Rolf Suey:
my uneducated guess is the tankers bubble unlikely to burst and it is inconsequential at best. real money was mostly from upstream capex and currently midstream pipelies and downstream distribution. with that in mind, I watch LNG with interest. the market is smaller and SG wanted to be a bigger part of its pricing (currently very fragmented).
see http://www.bloomberg.com/news/articles/2016-01-25/sgx-seeks-to-break-lng-s-price-link-to-oil-with-singapore-sling
http://www.straitstimes.com/opinion/the-geopolitics-of-a-world-awash-in-oil
http://www.straitstimes.com/business/companies-markets/government-committed-to-develop-singapore-as-lng-trading-hub-teo-eng
I only wonder if it is more politically/survival motivated - https://www.ema.gov.sg/Piped_Natural_Gas_and_Liquefied_Natural_Gas.aspx
Some cut and paste for my own reference from the above links:
He added that he hopes the Singapore SGX LNG Index Group (SLInG), a weekly index based on the submissions from international LNG players who offer their assessment of LNG prices this end, will "evolve to be the Asian LNG price over time". The index, launched by the Energy Market Company in September, now comprises about 20 players. At the same time, the long-term drivers for LNG "remain valid", said Mr Teo. "While we have seen subdued Asia demand because of slower economic growth, there is a growing desire for cleaner air and environment in Asia." In Singapore, for instance, the Singapore LNG Terminal began commercial operations in May 2013, while the Energy Market Authority announced in May this year the shortlisting of four companies to supply Singapore with LNG, he noted. The Government "remains committed to growing LNG as an alternative fuel source and to develop Singapore into a LNG trading hub", said Mr Teo.
Today, there is growing attention paid to the prospects of the US as an LNG exporter influencing prices in Asia and Europe. The shift occurred because of the unexpected emergence of unconventional oil and gas production in North America, especially as Saudi Arabia did not reduce its oil production to stabilise prices at relatively high levels.
The building of LNG terminals in Singapore will enable Singapore to benefit from price differentials in the Asian, European and North American gas markets. When the first LNG terminal began operations in 2013, Singapore was no longer dependent only on piped natural gas from Indonesia and Malaysia.
Nevertheless, the critical point is that the presence of increasing sources of supply is likely to result in energy prices stabilising at lower levels for the next decade compared to the last 10 years, provided there is no major political upheaval which disrupts energy markets.
Natural gas can be supercooled and liquefied to transport it on tankers between areas difficult to link by pipeline. LNG traded in Asia -- where sellers such as Qatar and Indonesia ship fuel to buyers including Japan or China -- has traditionally been pegged to crude prices. That’s because the region lacks a benchmark similar to Henry Hub in the U.S., which the country’s burgeoning LNG exporters use in sales contracts.
“When Singapore talks about being a pricing hub, it is talking more about being a physical hub for gas where as a buyer and seller you can put gas in and take gas out,” Gavin Thompson, Wood Mackenzie’s vice president for China and Northeast Asia gas and power, said in an interview. “That price for the physical commodity is then priced into the short-term spot and long-term contracts, potentially the same way Henry Hub is priced into long-term LNG contracts.”
“Given the nascent stage of market development for LNG, the majority, if not all” of the new contracts will be traded over the counter and cleared by SGX, Lily Chia, the company’s head of product management for commodities, said in an e-mail. The exchange sees SLInG -- shorthand for its FOB Singapore SGX LNG Index Group-- as a pricing tool for traders, financial institutions and power companies, she said.
In 2006, in a bid to diversify and secure the country’s energy sources, the Singapore government announced plans to build an LNG terminal that can be used to store LNG for local use and re-export the fuel to regional markets. The LNG terminal commenced operations on 7 May 2013.
