Regulators looking to tomorrow's LNG needs

Plans for extra demand under way even as S'pore's first terminal opens
Rachael Boon Straits Times 8 May 13;

THE country's first LNG terminal opened for business yesterday and regulators are already looking at how to meet the expected surge in demand for the energy source.

The assessment is necessary "in order to secure the additional gas that we need in the next five years or so", said Mr S. Iswaran, the Second Minister for Trade and Industry during a visit to the terminal yesterday.

Commercial operations at the $1.7 billion facility on Jurong Island were able to start after the first commercial cargo arrived on Monday.

It was delivered by energy firm BG Group, which has a licence to import and sell up to three million tonnes per annum (mtpa) of LNG (liquified natural gas).

Six companies, including Senoko Energy and Tuas Power Generation, will buy 2.7 million tonnes of that supply.

But regulators expect demand to surge far beyond that level and have begun looking at how the plant imports LNG.

The Energy Market Authority (EMA) launched the first round of a consultation process last year that involved getting feedback from importers like the BG Group.

It came up with two suggested models: having a sole importer or one that comprises BG Group and three other suppliers.

The second round of consultation will be launched later this month.

The EMA estimates that there will be an incremental demand of 1 to 1.5 mtpa by 2018.

Mr Iswaran said various criteria must be met when devising an import system.

"First, we must be able to meet our needs for competitively priced gas and stable supply. Second, we have a projected need for gas and the framework we have must be able to meet that future demand in a competitive manner.

He added that "it is important to create diversity, choice, flexibility and competition in the market so our end users have a choice in terms of how they go about procuring gas for their needs".

The Jurong Island facility has been built with expansion in mind.

It has two completed tanks - each 53m high and 90m wide - large enough for three stacked Boeing 747 aircraft.

The terminal, which warms the liquid natural gas into a gaseous state, will operate at its initial capacity of a 3.5 mtpa.

A third tank, additional jetties and regasification facilities will be completed by the end of this year, raising the terminal's capacity to 6 mtpa.

There are plans for a fourth tank to boost the capacity to 9 mtpa.