LNG terminal project may be staggered: EMA

Move aims to cut construction and development costs
Ronnie Lim, Business Times 31 Jul 08;

(SINGAPORE) Rising engineering, procurement and construction (EPC) costs here could lead the developer of Singapore's $1 billion liquefied natural gas (LNG) terminal to stagger the project to more closely match local demand and control costs, says the Energy Market Authority (EMA).

'For example, the developer could choose to construct a single larger tank first and a second one later when demand for liquefied natural gas increases significantly,' EMA said on its website. 'This could reduce the overall construction and development cost of the terminal, which would ultimately benefit end-users.'

Given the Jurong Island terminal site can accommodate four large storage tanks, this suggests Singapore could proceed with just one quarter of the project's envisaged capacity.

Developers PowerGas (70 per cent) and Gaz de France (30 per cent) 'will review the necessary staging of terminal infrastructure in the basis of design', EMA said.

PowerGas, which signed a deal with EMA in April to build the terminal, said at the time that design and engineering were already under way to ensure the facility is ready by 2012 in time for the expected first deliveries of LNG.

Gaz de France - which is involved in the entire LNG value chain from liquefaction to shipping and receiving terminals and gas transmission - came on board as PowerGas's joint-venture partner this month.

BT understands that Australian engineering firm WorleyParsons is helping with the terminal's design and engineering.

EMA said on its website that a feasibility study found that 'up to three storage tanks can be developed' on the 30-hectare LNG terminal site and that 'there may be space for a fourth'.

The feasibility study recommended the terminal have initial capacity of two 150,000 cu metre storage tanks with send-out capacity of three million tonnes per annum (tpa) in the first phase, with provision for expansion to six million tpa.

Previous reports said construction is expected to start next year, with the complex expected to include a jetty, unloading facilities, regasification equipment and associated civil and utilities infrastructure.

Contractors reportedly lining up for the lucrative contracts include specialist engineers like WorleyParsons, Foster Wheeler, Japan's Chiyoda Corporation and France's Technip.

LNG demand here in 2012 is expected to be around one million tpa and to take four to five years, that is until 2017, to reach three million tpa.