Singapore's LNG Terminal to catalyse new business opportunities

Channel NewsAsia 31 Mar 10;

SINGAPORE: Singapore's first Liquefied Natural Gas (LNG) Terminal and its supporting pipeline infrastructure are expected to spark new business opportunities.
Senior Minister of State for Trade and Industry S Iswaran said one possibility is to develop Singapore as a centre for LNG trading in Asia.

He was speaking at the groundbreaking ceremony for the terminal on Jurong Island.

Mr Iswaran said Singapore's central geographical position, between LNG demand in Northeast Asia and LNG supply from the Middle East and Australia, offers a key competitive advantage.

Terminal owner, Singapore LNG Corp (SLNG) has already started discussions on these possibilities with several industry players, who have expressed a keen interest to use the terminal capacity for storage and re-loading of LNG.

It is also looking at leveraging on the LNG terminal operations to offer integrated and innovative solutions to industries in Jurong Island.

For example, LNG can be used to cool air and separate it into its components of oxygen and nitrogen which companies can, in turn, utilise for their industrial processes.

Mr Iswaran said the LNG terminal could potentially offer not only low-cost, but also low-carbon integrated solutions for industries located on the island.

Six power generation companies have also entered into long-term purchase contracts for an initial tranche of around 1.5 million tonnes of regasified LNG.

They are: Senoko Energy, PowerSeraya, Tuas Power Generation, SembCorp Cogen, Keppel Merlimau Cogen and Island Power Company.

Mr Iswaran said this is a significant commitment by the generation companies, and ensures a sizeable base-load of LNG throughput from the start of terminal operations.

The S$1.5 billion terminal will have an initial capacity of 3.5 million tonnes per year.

The project is on track for completion by early 2013, after it was deferred by a year.

- CNA/yb

Work begins on LNG plant
Robin Chan, Straits Times 1 Apr 10;

WORK has started on the $1.5 billion liquefied natural gas (LNG) terminal that is set to play a pivotal role in Singapore's energy future.

Senior Minister of State for Trade and Industry S. Iswaran officiated at the 30ha Jurong terminal's groundbreaking ceremony yesterday.

When completed in 2013, the facility will have an initial capacity of 3.5 million tonnes per annum (mtpa), but will eventually be able to store 6 mtpa.

'When fully operational, it will not only help meet Singapore's growing energy needs, but also catalyse the development of a robust gas market to underpin our industrial growth,' said Mr Iswaran, who noted that meeting Singapore's long-term power needs required a diversified energy portfolio.

LNG is expected to contribute about 17 per cent of global gas supply in 2020, and the terminal is viewed as 'a key plank in Singapore's national energy strategy', he said.

Already, six power generation companies have signed 10-year purchase agreements with the terminal.

The six - Senoko Energy, PowerSeraya, Tuas Power Generation, Sembcorp Cogen, Keppel Merlimau Cogen and Island Power Company - have committed to an initial 1.5 mtpa of regasified LNG through BG Group, which is the sole buyer of LNG.

This is equal to about one-quarter of the volume of gas that Singapore now imports via its pipelines.

The facility will hire 50 people initially, expanding to 70 when the terminal ramps up capacity.

Project developer Singapore LNG Corp is to put in place a knowledge and technology-sharing programme for local staff. Executive director Neil McGregor said: 'We're bringing in Singaporeans to shadow expatriates who have that experience... and the other part is to send Singaporeans overseas so they can learn at other terminals.'

Plans for the LNG terminal have been in the works since 2006.

Island to start building Singapore plant
Business Times 1 Apr 10;

It signs deal with LNG supplier BG Group, ensuring feedstock for the project

ISLAND Power, now owned by India's GMR Group, is finally set to start building its Singapore plant, thanks to liquefied natural gas supplies here from early 2013.

Island was among the six buyers that signed up yesterday with LNG supplier BG Group for a total 1.5 million tonnes per annum of LNG, ensuring feedstock for its plant.

GMR's Southeast Asia head Ng Quek Peng told BT this means that Island can start building the long-stalled 800-megawatt plant on Jurong Island 'around October or November'.

The plant can then be up and running by 2013, as GMR officials earlier hoped.

Since GMR took over the Island project in May 2009, it has been trying to secure piped Indonesian gas from Sumatra through importer Gas Supply.

Talks between Gas Supply and Indonesia have been progressing, but there has been no firm deal so far, sources say.

Island tried for years under previous owners to bring in 110 million standard cubic feet daily (mscfd) of Indonesian gas daily through the Sumatra-Singapore pipeline for its plant. But it ran into commercial hurdles involving the pipeline incumbents.

No details were available at yesterday's LNG signing of how much Island, or any of the buyers, will take.

Lion Power, which owns Senoko Energy, indicated previously that it needs an extra 60 mscfd of LNG, on top of its current 230 mscfd of piped gas, to fuel its upgraded plant.

Most of the other buyers are likely to view LNG as a buffer in the form of an additional gas supply source, especially when their supplies of piped gas from Malaysia and Indonesia are depleted down the track.

LNG buyer BG Group will initially bring LNG into Singapore from its global network of plants, including Trinidad, Egypt, Equatorial Guinea and West Africa. It expects later to supply Singapore from its coal seam methane-to-LNG project in Queensland, Australia.

Six gencos seal LNG deals with BG Group
Long-term purchase deals help to underpin $1.5b LNG terminal project
Ronnie Lim, Business Times 1 Apr 10;

IT'S a 'full house' for Singapore's new $1.5 billion LNG terminal, which has been fully subscribed for.

The project has secured the support of the three biggest generation companies here, now all foreign- owned, a fourth new foreign genco player here and, to the surprise of industry observers, the two big local conglomerates, Keppel Corporation and Sembcorp, both of which already import piped natural gas from Malaysia and Indonesia respectively.

At yesterday's ground- breaking for the Jurong Island terminal, all six signed deals with the appointed LNG aggregator or buyer, Britain's BG Group, to buy a total 1.5 million tonnes per annum (tpa). The contracts, of up to 15 years, come with options for increased volumes should the gencos proceed with their planned expansions.

The six buyers comprise the three biggest power players, Lion Power-owned Senoko Energy, YTL-owned PowerSeraya and China Huaneng-owned Tuas Power, new player India's GMR-owned Island Power and Sembcorp Cogen and Keppel Merlimau Cogen.

The event was witnessed by S Iswaran, Senior Minister of State (Trade & Industry and Education) as well as by top genco representatives, among them KepCorp chief executive Choo Chiau Beng and Sembcorp president and CEO Tang Kin Fei.

These initial liquefied natural gas deals - representing one quarter of the natural gas volume which Singapore currently imports by pipeline - help underpin the terminal project, said Mr Iswaran, as they will ensure a sizeable base-load from the start of operations come early-2013.

Industry observers told BT that the support of the two local conglomerates, themselves piped gas suppliers here, reinforce the government's LNG push, given that - as Mr Iswaran put it - it is the first step 'to diversify our energy sources and meet our future needs'.

'When fully operational, it will not only help meet Singapore's growing energy needs, but also catalyse the development of a robust gas market to underpin our industrial growth,' he added.

This is because the LNG terminal, with an initial storage capacity of 3.5 million tpa 'will be the first open-access multi-user terminal in Asia . . . capable of importing and re-exporting LNG from multiple suppliers,' said Mr Iswaran.

Neil McGregor, executive director of Singapore LNG Corporation, the terminal developer, said that once it completes building the project, SLNG's focus will turn from the terminal being a 'project' to being a 'business'.

Singapore has the potential to become the 'Henry Hub' of Asia, much the same as it has done for oil, he said, referring to the renowned US pricing point for natural gas futures traded on the New York Mercantile Exchange. The project also provides the opportunity to grow Singapore's talent base in this specialist area, he added.

Mr Iswaran said that Singapore's central geographical position, between LNG demand in North-east Asia and LNG supply from the Middle East and Australia, offers a key competitive advantage for LNG trading out of Singapore.

'SLNG Corp has already commenced discussions on these possibilities with several industry players, who have expressed a keen interest to use the terminal capacity for storage and re-loading of LNG,' he added.

Russia's Gazprom, the world's largest gas producer, is among them, BT reported recently. Gazprom, which recently set up marketing and trading operations here, has already traded six spot cargoes of LNG here, and is targeting to trade 25 cargoes, or two million tonnes, this year, worth a total of US$450 million.

'SLNG is also looking at leveraging on the LNG terminal operations to offer integrated and innovative solutions to industries in Jurong Island,' Mr Iswaran said, citing for example that LNG can be used to cool air and be separated into its components of oxygen and nitrogen which companies can, in turn, use for their industrial processes.

'The LNG terminal could potentially offer not only low-cost, but also low-carbon integrated solutions for industries located on the island,' he added.