Completed on the sidelines of the Deloitte Energy Trading Summitt the survey of 80-plus senior energy leaders found 74% believed Singapore would reach its target by 2023, compared with 10% favouring China and 10% Japan.
Deloitte oil and gas Asia Pacific regional leader Mike Lynn said that Singapore met all the criteria necessary for an ideal trading hub, with "world-class trading trading infrastructure already in place, excellent institutions, [it] offers low geopolitical risk whilst situated in an ideal geographic location with deep and liquid financial and capital markets, in addition to an attractive tax and regulatory regime".
Deloitte noted the need for a liquid and transparent LNG pricing benchmark as Asia evolves as trading hub for the commodity.
"Fifty two percent of survey respondents said the Platts Japan/Korea Marker will be the most widely adopted for spot trades in 2023, followed by the Henry Hub Natural Gas Spot Price (16%) and the SGX LNG Index Group," Deloitte said.
When the Australian Competition and Consumer Commission recently announced that as a measure to improve gas pricing transparency in Australia it would begin publishing the LNG spot price it was the JKM it adopted.
"As the preferred spot price benchmark, and one that's genuinely gathering traction in the Asian market, a price marker like the JKM is consistent with the move away from the traditional oil-linked pricing to a system based on gas becoming a globally traded commodity and needing its own pricing benchmark," Lynn said.
He called it a "clear message" that Asia wanted its own pricing benchmark that reflected regional market dynamics.
Oil-linked prices are something that Santos has been banking on, dropping its hedging to 30% this year and 10% next year and was one of the reasons for it to knock back US equity firm Harbour Energy's A$14.4 billion bid Tuesday evening.
Santos CEO Kevin Gallagher had earlier said the company wanted to be more exposed to the oil price and Santos statement said that it did not like Harbour's conditions around hedging and thought itself worth more with the Brent now on its heady upward trajectory.
Deloitte isn't backing a horse in the three-way LNG race for global supremacy between Australia, the US and Qatar as top LNG producer by 2023, but does think the three largest LNG importers will be the North Asian giants China, Japan and South Korea, in that order.
India is emerging fast also and has been signalling since last year its plans to massively expand LNG consumption.
"India is not as far up the maturity curve as China, but like China, the country is shifting towards lower carbon energy resources. It is anticipating a big spike in energy demand due to economic and demographic growth. LNG has a vital role to play in India's growth story," Deloitte Global LNG leader and Australia oil and gas lead Bernadette Cullinane said.
According to recent Commonwealth statistics only 3% of Australian LNG goes to India.
As for the three major suppliers: "It's a very competitive market with not much separating each of the three nations," Cullinane said.
Qatar's strengths include low-capital intensity operations and the ability to expand quickly via brownfield and the US has the operational and political ability to develop its huge shale resources quickly.
And a huge benefit will be the Panama Canal expansion it can divert cargoes to Asia through; 52% of respondents saw benefit to their business from the expansion, which could further threaten Australia given its current Asia dominance is predicated in part on proximity.
