Singapore to explore second LNG terminal

It could double fuel storage capacity; proposals for feasibility study sought
Feng Zengkun Straits Times 3 Dec 12;

SINGAPORE will look into the feasibility of building a second liquefied natural gas (LNG) terminal which could double its storage capacity for the fuel.

Last week, the Energy Market Authority (EMA) called for proposals for a six-month feasibility study to look into a large LNG terminal as well as a smaller, satellite version.

The project is expected to start by next March and will include studying potential sites identified by the authority, as well as the terminals' economic viability.

EMA said in its tender document: "In anticipation of future power plant developments, a new LNG terminal may have to be constructed and the gas pipeline network expanded to deliver gas to future power plants."

Currently, about 80 per cent of Singapore's electricity is generated using piped natural gas from Malaysia and Indonesia. The gas goes to power-generation companies in Singapore that turn it into electricity and feed it into the national grid.

EMA expects the gas - in both piped and liquefied forms - to make up more than 90 per cent of Singapore's fuel mix in future.

A $1.7 billion LNG terminal on Jurong Island, the Republic's first, is scheduled to start operations next year. It will allow Singapore to import and store liquefied gas from other countries.

This will boost the country's energy security by diversifying its fuel sources.

The terminal is expected to have a capacity of nine million tonnes a year by 2017, but this can be boosted by building more storage tanks to a maximum of 15 million tonnes a year in future.

EMA said a second large terminal should also be able to handle up to 15 million tonnes a year, while the smaller satellite terminal would have a fifth of that capacity.

It wants to know, among other things, how the terminals would affect surrounding areas and if the smaller terminal can be co-located with existing structures.

For each of the potential sites, the consultant will draw up "a conceptual engineering design and layout plan" for the terminal, and estimate its cost and how long it would take to build.

EMA also wants feedback on whether a proposed expansion of the gas pipeline network can meet projected demand of future power plants. It wants studies of various gas supply disruption scenarios, including the failure of the proposed LNG terminals.

Energy Studies Institute energy economist Tilak Doshi said new terminals would allow Singapore to import the gas from more countries. "In one stroke, we will no more be dependent on Malaysia and Indonesia, which are themselves facing shortages for domestic use," he said.

He added that the study was timely because of vast natural gas reserves recently discovered in the United States and Australia.

The recoverable reserves in Australia, for example, are estimated at 396 trillion cubic ft (tcf), but its annual domestic gas usage is just 1 tcf.

Recently, International Energy Agency executive director Maria van der Hoeven said Singapore "was in a good position" to develop the first regional spot trading market for natural gas, due to its location and experience in oil trading.

Such a market would allow gas prices to be set depending on its own supply and demand, without being influenced by other markets such as crude oil. Traditionally, gas prices are linked to oil prices.

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