Malaysia and Singapore need to develop an Asian liquefied natural gas (LNG) hub as a platform to provide an economically sustainable energy solution to Asian countries.

Chief Executive Officer of Singapore's Pavilion Energy, Seah Moon Ming said the initiative could facilitate transparent LNG pricing and price discovery, leading to an Asian LNG Price Marker as well as development of financial instruments such as LNG future contracts.

"It is timely for the two countries to work together towards an Asian LNG hub as their locations in the Straits of Malacca and South China Sea are host to some of the world's vital sea lanes with about 50 per cent of global LNG supplies passing through each year. "I am confident the Asian LNG hub would benefit many countries, even suppliers of LNG. The United States, a major supplier of LNG, has taken an interest in this initiative," he said in his keynote address at the International New York Times Energy For Tomorrow Conference, here today.

The two-day conference themed 'Powering Sustainable Development' is a critical international meeting point for some of the most influential figures from the global energy community including government policymakers, senior business figures and thought leaders. Seah said the recent strategic developments in the oil and gas sector in Malaysia and Singapore also represented a scope for closer partnerships between both countries in the energy and related services.

"The Singapore government plans to build a second LNG terminal to further add geographical diversification to the country's LNG infrastructure. "Separated by the Straits of Johor is Malaysia's Pengerang project, a world-class oil storage terminal with plans for an LNG terminal and storage facilities," he said.

He added that both countries should also start looking for opportunities to develop an integrated gas market as part of the wider Asian LNG hub initiative. "Further ahead when the time is right, we could also look at how to tap the US$7 billion Trans-Asean Gas Pipeline project which connects 4,500 kilometres of gas pipeline networks of all Asean member states, so that the benefits of an Asian LNG hub can be fully reaped and enhance energy security for Asean," Seah said. Singapore is Malaysia's largest foreign investor, and the bilateral trade between the two countries amounted to almost S$114 billion in 2013. -- BERNAMA