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Singapore’s Temasek strikes first LNG pact with top European supplier

10.30.2013  | 

Pavilion Energy, owned by Temasek Holdings, will receive 500,000 Mtpy of LNG for 10 years starting in 2018, the company said, without identifying the seller. The contract is with “a major European oil and gas multinational” for delivery into Singapore and the region, CEO Seah Moon Ming said.

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By PRATISH NARAYANAN

SINGAPORE (Bloomberg) -- Pavilion Energy, the liquefied natural gas unit of Singapore’s state-owned investment company, made its first long-term deal with a European supplier.

Pavilion Energy, owned by Temasek Holdings, will receive 500,000 Mtpy of LNG for 10 years starting in 2018, the company said in an e-mail, without identifying the seller. The contract is with “a major European oil and gas multinational” for delivery into Singapore and the region, CEO Seah Moon Ming said in a speech at a conference in the city-state.

Singapore, Asia’s oil-trading center, is also vying to become a hub for LNG, supercooled gas shipped by tankers rather than pipelines. It opened its first LNG terminal in May with an initial annual capacity of 3.5 MMt, increasing to 6 MMt by the end of the year. Natural gas supplied 84 % of Singapore’s electricity in 2012, according to the Energy Market Authority, the nation’s energy regulator.

Temasek set up Pavilion Energy in April to tap growing demand for LNG in Asia, the company said at the time. Pavilion Gas, its unit that manages gas operations and LNG distribution, has started trading the fuel and expects to complete its first cargo delivery to Asia by February, Seah said.

“We are also looking into global investments with the aim of building a diversified asset portfolio,” Seah said. The company will add more funds to its initial authorized capital of $1 billion to fulfill its ambitions, he said last month.

A fourth tank is planned to take capacity to 9 MMt by 2016. That will allow Singapore to offer last-minute deliveries, or spot cargoes, to buyers in Asia seeking an alternative to long-term contracts.

BG Contract

BG won the contract in 2008 to supply 3 MMt of LNG to Singapore annually over 10 years starting in 2013. Singapore may award as many as two further supply licenses, seeking 1.5 MMtpy initially, Second Trade Minister S. Iswaran said. The country’s energy regulator will lift a moratorium on piped gas supplies when BG has fulfilled its contract or by 2018, Iswaran said.



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