Third LNG tank to boost Singapore's fuel security

It will nearly double the capacity of Jurong Island terminal now being built
Victoria Vaughan Straits Times 3 Nov 10;

SINGAPORE will add a third liquefied natural gas (LNG) tank to its upcoming terminal as more power companies switch to the relatively green fuel.

The move will nearly double the capacity of the terminal being built on Jurong Island.

This could boost regional trade in the gas and lead to global business opportunities as firms such as BP and Gazprom establish LNG trading offices here.

Experts said the move will also enhance Singapore's fuel security. The third tank will take the capacity of the terminal, to be ready by 2013, from 3.5 million tonnes per annum (mtpa) to 6mtpa.

The move was announced yesterday by Senior Minister of State for Trade and Industry, and Education S. Iswaran at the opening of the Power-Gen Asia conference at Marina Bay Sands.

Singapore power plant companies have recently raised their requests for LNG from 1.5mtpa to 2mtpa between them as they seek to expand into the sector and replace fuel oil, which produces more carbon dioxide when burnt.

These firms include Senoko Energy, PowerSeraya, Tuas Power Generation, SembCorp Cogen, Keppel Merlimau Cogen and Island Power Company.

For example, PowerSeraya last month launched its 800MW Co-Generation Combined Cycle Plant, which uses natural gas and replaces three of its oil-fired generation plants.

PowerSeraya chief executive John Ng said: 'As we are primed to be a significant purchaser of LNG, we will be able to take full advantage of the opportunities the sector will yield.'

He added that an increase in gas storage capacity in Singapore will enhance the fuel security of the LNG network.

Singapore gets 80 per cent of its energy from piped natural gas from Indonesia and Malaysia.

LNG can be shipped from all over the world, helping to secure Singapore's energy supply. The terminal will initially get LNG from Trinidad and Tobago, and Egypt, but will eventually move to sources closer to home such as Australia.

Mr Iswaran said the extra capacity will 'enhance our energy security by allowing industry players to enter into commercial contracts for back-up supplies of LNG'.

The minister added that, with firms such as ConocoPhillips and Shell setting up LNG trading offices here, the new terminal will kick-start business opportunities.

Mr Michael Dolan, senior vice-president of Exxon Mobil Corp, welcomed the third tank, which will be ready by 2014.

'These types of opportunities are always helpful and we welcome the additional capacity. Of course the commercial details are yet to be determined but it sounds like a very nice flexibility to be added to Singapore,' said Mr Dolan, who is also a member of the International Advisory Panel on Energy.

Experts on the panel, chaired by Mr Iswaran, said the abundance of natural gas, new technology to mine it and its relatively low carbon emissions mean it is a growth market.

Lord Ronald Oxburgh, former chairman of Shell Transport & Trading Company, said: 'If you are concerned about greenhouse gas emissions in the local environment, gas is much more attractive and much less expensive than using coal. If gas prices behave as they are expected to, I think we will see gas replacing coal in almost all markets.'

The panel made the comments at a press conference yesterday following the conclusion of their three-day meeting, which aims to advise Singapore on its energy masterplan. Nuclear power and renewable energy were also hot topics.

Mr Peter Schwartz, chairman of Global Business Network, supported Singapore's 'watch and wait' policy regarding nuclear power.

'I think the watch will go on for five to 10 years or longer. It's not an urgent decision as gas supplies are abundant so it becomes a question of making sure you can act in a timely way and have the capability domestically to make intelligent choices among the options being developed,' he said.

He said that Singapore will not see a nuclear power plant for least 10 to 20 years.

$400m extra investment to expand LNG terminal
Decision triggered by stronger-than- expected demand from gencos, industries
Ronnie Lim Business Times 3 Nov 10;

(SINGAPORE) The Republic has decided to invest a further $400 million to boost its initial $1.5 billion LNG terminal development.

This follows stronger- than-expected gas demand from power generating companies (gencos) and industries here to fuel their utilities plant expansions, plus keen user interest expressed by international traders and liquefied natural gas producers.

The surprise move comes barely seven months after the groundbreaking in March of the first-phase 3.5 million tonnes per annum (tpa) LNG terminal on Jurong Island.

S Iswaran, Senior Minister of State (Trade & Industry and Education), announced yesterday at the Power-Gen Asia conference that 'we will accelerate the expansion of the LNG terminal by building a third storage tank which will increase the terminal's capacity to 6 million tpa'.

'Expanding the terminal now will allow Singapore to seize opportunities in the global LNG market and establish us as a centre for LNG trading in Asia, while meeting the growing needs of our domestic market,' he said.

Singapore LNG Corporation's chief executive Neil McGregor told BT in an interview that SLNG is currently sorting out the EPC (engineering, procurement and construction) contract for the additional tank, which is likely to cost around $200 million.

It will be built in tandem with the first-phase terminal and will likely be operational in 2014, shortly after the expected first LNG deliveries here in April-May 2013.

'Additionally, we will spend another couple of hundred million dollars to build a second jetty,' Mr McGregor said, with this serving as a back-up to its first jetty, which will be able to handle about 10 million tpa of LNG.

'We are getting ready to build this in Q1 next year,' he added, saying that the second jetty will provide security as well as flexibility, enabling the terminal to handle the increased domestic gas needs, as well as international trading opportunities. 'The fact that we are now expanding even before the first-phase terminal is up and running proves the government is on the right track,' he added.

In his speech, Mr Iswaran disclosed that a push factor has been the stronger uptake for LNG by the six gencos here which will need it to fuel their announced 3,600 megawatts of new capacity to meet electricity demand growth here.

With economic recovery, average electricity demand here jumped 11 per cent in the first half of this year, compared to the same period last year, and the forecast is that electricity demand here will rise by up to 3 per cent annually until 2018. Gas demand will similarly increase, Mr Iswaran added.

From an earlier indication of 1.5 million tpa, the gencos have now committed to purchase an initial 2 million tpa from aggregator BG Group, he disclosed. This represents a sizeable baseload of throughput for the first-phase 3.5 million tpa terminal.

Furthermore, international traders have also expressed interest in trading spot cargoes through the Singapore terminal. Thus the additional third tank will allow Singapore to tap this growing market for spot and short-term LNG contracts, Mr Iswaran said. Already, companies like BP, ConocoPhillips, Gazprom and Shell have set up LNG trading offices here to capitalise on this.

'We've had approaches from many traders as well as LNG producers, including from outside this region, to use the Singapore terminal for transhipment of cargoes throughout the region,' added SLNG's Mr McGregor.

'Now we have to get the commercial framework ready, likely within a year, on how the tanks are to be utilised as an unregulated, commercial business.'

In the longer term, SLNG's masterplan provides for a 9 million-plus tpa terminal at the 40-hectare Jurong Island site - with potential for future activities like LNG bunkering and even an LPG (liquefied petroleum gas) terminal to bring in the feedstock for petrochemical plants here.

Third LNG tank to be built on Jurong Island
Chris Howells Channel NewsAsia 2 Nov 10;

SINGAPORE: Singapore LNG (SLNG) will add a third liquefied natural gas tank to its Jurong Island facility, which is currently being built.

The new tank will bring the total LNG handling capacity in Singapore to six million tonnes per annum (Mtpa), from the initial 3.5 million Mtpa.

The additional Liquefied Natural Gas (LNG) tank in Singapore would mean greater flexibility for the country to meet its future gas opportunities and pursue new business opportunities in the LNG market.

The investment, announced on Tuesday by Senior Minister of State for Trade & Industry and Education S Iswaran, is a 180,000 cubic metres LNG tank to be built in Singapore.

Mr Iswaran, who was at the POWER-GEN Asia Conference, said: "Expanding the terminal now will allow Singapore to seize opportunities in the global LNG market and establish ourselves as a centre for LNG trading in Asia while meeting the growing needs of our domestic market".

As demand for liquefied natural gas is heating up in Asia, SLNG said the region will need 100 million tonnes of supply annually in the next 10 years, which is currently 50 per cent of the world trade in the gas.

The government is ramping up the new LNG facility to seize on opportunities in the global LNG market.

Lawrence Wong, Chief Executive, Energy Market Authority, said: "There are opportunities for the LNG terminal not just to provide a service to bring in LNG to Singapore but also to provide storage and reloading, storage and exports, transshipment of LNG because there is interest among companies to use the LNG terminal as a site for LNG trading.

"This offers a new business opportunity. SLNG corp is looking at how best to take advantage of that and the availability of a third tank will certainly help SLNG make full use of these business opportunities."

The decision to add a new tank to the LNG facility was prompted by growing demand from power companies.

SLNG said it could increase its capacity if demand warrants and it has space for up to seven tanks, potentially taking the total LNG handling capacity to nine million tonnes.

The six power companies here will now procure two million tonnes of gas annually from UK's BG Group, up from 1.5 million tonnes that they initially contracted.

Neil McGregor, CEO, Singapore LNG Corp, said: "The petrochemical sector here and the refineries also need gas in the long term, but a number of those players are also significant gas producers.

"For instance, they could bring their own gas in here and there is a framework for allowing that. So we could see them on both sides of the equation, one as a significant user of our services but also as a significant trader."

The first phase of the Singapore LNG terminal is due for completion in 2013. - CNA/wk/fa