It will import 3 million tonnes a year to diversify sources of natural gas
Grace Chua Straits Times 30 Mar 13;
SINGAPORE got its first shipment of liquefied natural gas (LNG) this week, in time for the Republic's first LNG terminal, which will be up and running in the next few weeks.
The LNG cargo arrived on Wednesday from Qatar on a massive QMax carrier ship, heralding a new era in energy security for the island.
Up until now, Singapore has relied largely on piped natural gas from Indonesia and Malaysia for its energy needs.
With the new Singapore LNG Terminal at Jurong Island, it will import some 3 million tonnes of LNG a year to diversify the geographical sources of natural gas, the main fuel it uses for power generation.
Singapore gets more than 80 per cent of its electricity from natural gas, about 18 per cent from fuel oil, and the rest from other sources like waste incineration.
The $1.7 billion Singapore LNG terminal is built and run by the government-owned Singapore LNG Corporation.
There are plans to install more tanks to be able to import up to 9 million tonnes a year, and room for even more tanks in future.
For now, Singapore plans to import LNG from Trinidad & Tobago, Egypt and countries in West Africa.
Singapore LNG Corporation had previously said it looked to Qatar for its first batch of LNG because it offered the most competitive terms overall.
Earlier this month, The Straits Times visited Ras Laffan Industrial City, Qatar's answer to Jurong Island.
Where Jurong Island is a mere 32 sq km and lacks natural resources, Ras Laffan is a full 295 sq km and taps a 6,000 sq km gas field off Qatar's north-east shore.
This North Field was discovered in 1971, and today Qatar is the world's largest producer of LNG, accounting for 77 million tonnes a year.
The gas is pumped from offshore platforms, and water, sulphur, carbon dioxide and heavier hydrocarbons called condensates are removed.
What is left is methane, the part that is burnt for energy generation. That is cooled to minus 160 deg C, which turns it into liquid.
Piped natural gas from neighbouring countries needs undersea pipelines. LNG, after it is regasified, will still have to be piped around Singapore, but no undersea pipelines are needed as it comes in by ship.
The world is demanding - and supplying - more natural gas.
The International Energy Agency reckons global use of gas by 2035 will rise 50 per cent from 2010 levels and account for a quarter of the world's energy mix, especially as China's demand rises and if countries use it instead of coal.
Closer to home, Singapore firms will be installing more than 2,000MW of power generating capacity by 2015, adding to the current 10,000 or so MW, largely to meet future industrial de-mand.
Meanwhile, the United States is considering exporting some of its shale gas as LNG.
But will importing LNG lower energy costs for Singapore consumers? Not necessarily.
While a large supply has driven gas prices down in the US, where gas is traded freely, Asian gas prices are still tied to crude oil.
And US pipeline gas must be processed and transported before it eventually arrives in Asia, which will add costs.
As a fossil fuel, natural gas emits the greenhouse gas carbon dioxide when it is burned, but a third less than oil and half as much as coal, said Professor Michael Quah, director of the National University of Singapore's Energy Office.
If Singapore wants to de-link its energy use from its economic growth, Prof Quah said, it can keep domestic energy demand down through conservation and increased energy efficiency, while for petrochemicals, manufacturing and power generation, moving to lower-carbon-footprint industries could help along with energy efficiency measures.
But natural gas will be around for the long term.
"At issue are the economics versus Singapore's ability to harness renewable energy, including from our next nearest neighbours," he said.
