Joyce Hooi, Business Times 10 Feb 10;
(SINGAPORE) The people behind Singapore's first liquefied natural gas (LNG) terminal were sanguine yesterday at the fifth LNG Supplies for Asian Markets 2010 conference.
With the main building contractor for the terminal on Jurong Island finally appointed, Singapore can now begin carving itself a slice of the region's growing LNG pie.
'Today, Asia accounts for about two-thirds of the world's LNG imports. The centre of gravity of LNG markets will shift towards this region,' said Lawrence Wong, chief executive of Singapore's Energy Market Authority (EMA). Mr Wong was speaking at the conference for LNG buyers and suppliers yesterday.
Currently, the 30-hectare Jurong Island facility has an initial capacity of 3.5 million tonnes per annum (mtpa) and it is expected to eventually ramp up to six mtpa or more.
Over the next few weeks, BG Group - the appointed LNG aggregator or sole buyer - expects to secure 1.5 mtpa of sales to end-users, which is half its franchise supply quota.
'We might have unutilised storage capacity in the terminal which we would like to use for LNG trading, which will serve LNG producers with storage constraints at their liquefaction plants,' said Mr Wong.
Singapore's aspirations in the liquid gas market, however, are not limited to LNG.
'We could also look into the storage and trading of liquid petroleum gas (LPG),' Mr Wong said.
The LNG terminal, which will be ready in 2013, will be given some lead time to get on its feet through a moratorium on further piped natural gas imports until LNG imports reach 3.3 mtpa or 2018, whichever comes earlier.
Currently, Indonesia's West Natuna gas field is contracted to supply piped gas to Jurong Island until 2023.
Naturally, the moratorium was welcomed by BG Group's general manager, Dan Werner, who also pointed out yesterday that such reserves from Indonesia and Malaysia could deplete any time before 2023.
'The policy is a very thoughtful decision to ensure that LNG can enter the market in time, instead of later at a time when conditions might not be as conducive,' Mr Werner said.
Even so, this will be Singapore's first foray into the LNG terminal business.
The LNG trading idea, a relatively new one in the region, was described as a 'leap of faith' at the conference yesterday by Neil McGregor, executive director of Singapore LNG Corporation - the entity set up by the EMA to spearhead the terminal project.
While it may be a leap of faith, it appears to also be a leap in the right direction for Singapore. 'Geographically, Singapore is located halfway between demand and supply,' Mr McGregor said. 'Lots of companies here have been asking us if they can have space in the terminal.'
