Lights will keep on running in Singapore

Sheralyn Tay, Today Online 19 Apr 08;

IT IS a milestone in Singapore's journey to strengthen and secure its energy needs so that power disruptions, like the massive blackouts in 2004, will not occur again.

Caused by a valve fault in a gas pipeline, the disruptions had plunged half the island into darkness in the worst blackout here in a decade, spurring a concerted search for alternative energy sources.

One stage of that search ended on Friday, as the Energy Market Authority (EMA) identified BG Asia Pacific as the liquefied natural gas (LNG) aggregator for Singapore.

As the national aggregator, BG has an exclusive licence from EMA to import and sell up to 3 million tonnes of LNG a year here. And it will start to do so from 2012 when the first LNG terminal by PowerGas is slated to start operations.

According to Mr Martin Houston, executive vice-president and managing director of BG Americas and Global LNG, this agreement — which will last "up to 20 years" with Singapore — is BG's first "long-term" contract in the Asia-Pacific region.

"It signals our commitment to help Singapore meet its long term energy goals," he added.

The planned $1-billion terminal on Jurong Island has capacity for 3 million tonnes of LNG and can be expanded to accommodate 6 million tonnes annually. Based on 2005 consumption data, 3 million tonnes per annum (Mtpa) will satisfy about 30 per cent of Singapore's energy needs.

In a statement, Senior Minister for Trade and Industry S Iswaran said that BG will play a "strategic role" in Singapore's energy diversification efforts. Currently, Singapore relies heavily on piped gas from Malaysia and Indonesia and gets 80 per cent of its electricity from natural gas imported via pipelines.

But LNG — which can be transported by tankers instead of pipelines — offers an alternative. For the consumer, it means the reassurance that "household lights will keep on running", said Mr Graham Holland, EMA's senior commercial advisor on the LNG project.

As for whether BG's entrance could spell cheaper prices for consumers, EMA said it was too premature to comment. Electricity tariffs have been on a steady rise, and early this year prices rose by an average of 1.24 cents per kilowatt hour (kWh) — about 6 per cent — up from 21.38 cents per kWh.

As for industry players, the creation of an LNG market could spell "opportunities" for other LNG gas suppliers and potentially open up the market as demand surpasses 3 Mtpa.

Said EMA chief executive Khoo Chin Hean: "Creating an LNG aggregator … has made Singapore a more attractive market for LNG suppliers."

This will be timely as the energy market here opens. About four-fifths of Singapore's electricity is generated using natural gas now, but this is likely to grow as the population increases and the two Integrated Resorts come on board. Demand for LNG in Singapore is expected to hit 1 million tonnes a year by 2012, and grow to 3 million tonnes by 2018.

BG wins contract to be exclusive Singapore LNG importer
Channel NewsAsia 18 Apr 08;

SINGAPORE - Some 80 per cent of Singapore's electricity is generated by piped natural gas which is imported from Malaysia and Indonesia.

And gas will remain a mainstay for power generation because gas-fired power plants are among the most efficient.

So the Energy Market Authority (EMA) has selected BG Asia Pacific as the LNG supplier for Singapore.

Khoo Chin Hean, Chief Executive Officer, EMA, said: "Demand for natural gas will rise as our economy grows. In addition, industrial projects, like those in the petrochemical sector will continue to contribute to this gas demand growth. The government decided to import LNG to provide security of supply. LNG will enable us to diversify our supply sources.

This decision comes after EMA called for companies to submit bids last September and BG edged out four other shortlisted bidders.

Mr Khoo said that BG offers three million tonnes per year of LNG from Egypt, Trinidad & Tobago and future Australian supplies.

"BG offers firm supply at competitive prices from its global portfolio from Egypt, Trinidad & Tobago and future Australian supply," he told a news conference on Friday.

BG and EMA signed a Memorandum of Agreement which is a comprehensive contract detailing BG’s responsibilities in the role of the LNG aggregator.

The role of the aggregator is to aggregate demand for regasified LNG from all end-users of gas in Singapore, and to procure LNG supply for these end-users.

Senior Minister of State for Trade and Industry, S Iswaran said: "As the LNG aggregator, BG will play a strategic role in Singapore’s energy diversification efforts.

"We have taken a significant step into the global LNG market and with the entry of BG, Singapore will gain greater access to competitive, reliable and secure gas supplies from different parts of the world."

Singapore said last year it expected to import one million tonnes per year of LNG by 2012, below the terminal's annual capacity of three million tonnes.

The EMA said construction of the LNG Terminal on a 30-hectare reclaimed site on Jurong Island is on track. Reclamation works have started and will be completed by the end of the year. And PowerGas is expected to begin building the terminal in early 2009.

Currently, it's unclear if consumers can expect to pay less for electricity when LNG becomes more prevalent.

Stakeholders said this will be determined by the market. -CNA/vm