Competition triggers more global LNG spot deals

Competition is triggering more global liquefied natural gas spot deals, a positive sign for Singapore's plan to trade the resource, an official with Norway's Statoil said in a report published Friday.

"LNG used to be traded 100 percent on long-term contracts of 20 years between buyer and seller," The Business Times quoted Statoil's vice-president Richard Ericksen as saying.

"Today, 15 to 20 percent is sold spot," he said.

Ericksen said Singapore's plan to trade LNG, besides importing it as an additional fuel source for power stations here, could be feasible.

Statoil is the world's third-largest oil exporter. It accounts for half of Norway's oil production and more than 80 percent of its gas production.

All the natural gas it now produces from the Norwegian Continental Shelf is piped to neighboring European markets.

Singapore is looking at building on its status as a regional oil-trading hub by venturing into LNG trading after building an LNG receiving terminal.

Current supplies are piped in from Malaysia and Indonesia.

The Energy Market Authority is concerned that LNG imports should not overwhelm the quantity of natural gas now piped under the longterm contracts with neighboring producers.

Spot trading of LNG involves the trading of cargoes on carriers, not out of a receiving terminal. (*)