Singapore’s Liquefied Natural Gas (LNG) terminal on Jurong Island will now have a third 180,000 m3 LNG tank, in addition to the two that are already being built.
With this third tank, the terminal will have the capacity to handle 6 million tonnes per annum (Mtpa) of throughput, up from the initial 3.5 Mtpa. This additional investment in the third tank gives Singapore greater flexibility not just to meet its future gas needs, but also to pursue new business opportunities in the LNG market.
Announcing this today at the POWER-GEN Asia Conference during the Singapore International Energy Week, Mr S Iswaran, Senior Minister of State for Trade & Industry and Education, 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.”
Strong LNG Uptake by Singapore Companies
With growing electricity demand, there has been a stronger uptake of LNG by companies in Singapore. In the first quarter of 2010, the six power companies – Senoko Energy Pte Ltd, PowerSeraya Ltd, Tuas Power Generation Pte Ltd, SembCorp Cogen Pte Ltd, Keppel Merlimau Cogen Pt e Ltd and Island Power Company Pte Ltd – contracted for an initial tranche of 1.5 Mtpa of regasified LNG.
These companies have now increased their gas volumes to 2 Mtpa of regasified LNG. The increase reflects the demand for more gas to fuel new generation capacity. Altogether the six power companies have either started or are planning to build around 3,600 megawatts of new gas-fired generation capacity.
There is also keen interest by industrial companies outside the power generation sector to purchase LNG to fuel new businesses and project expansions. This will add to the increase in LNG demand over time.
“We have seen higher-than-expected demand for LNG this year, and expect the strong demand for gas to continue into the future. Given the 2-3 year lead time required for the construction of LNG tanks, it is timely to expand the LNG terminal now with the addition of a third tank.
The additional storage capacity will provide both power companies and industrial users with more options to import LNG and manage their fuel requirements, thereby enhancing Singapore’s energy security,” said Mr Lawrence Wong, Chief Executive of the Energy Market Authority (EMA).
A Catalyst for LNG Trading
Beyond providing increased storage capacity to cope with new demand, the third tank is also expected to catalyse new business opportunities that would allow LNG traders to store and re-export LNG cargoes. Mr Neil McGregor, Chief Executive Officer of the Singapore LNG Corporation (SLNG) added, “Many international LNG traders have approached SLNG to express their keen interest to use the Terminal for trans-shipment of LNG cargoes throughout the region.
The third tank will provide SLNG with additional LNG storage capacity to meet the needs of such traders. SLNG is currently weighing the Engineering, Procurement and Construction options for the third tank, and we aim to deliver the third tank in a cost-effective, timely and safe fashion.”
An Asset to grow SLNG’s Future
“The third tank is an infrastructure that cements the future for multiple parties. It is in line with the Government’s aspirations to develop Singapore as a regional trading hub. We have identified several new businesses that can be developed by leveraging on our LNG handling infrastructure, which in turn can generate incremental income for SLNG in the future.
It is our intent to carve out these new businesses separately from our Throughput, Storage & Send-out and Peaking services. The development of the third tank is in line with our strategy and masterplan.
It positions SLNG with sufficient capability and standing in the evolving LNG market, to grow our business and to eventually become the natural gas hub for the region,” said Mr McGregor.
Source: Singapore Energy Market Authority, November 2, 2010