By CHOU HUI HONG and RAMSEY AL-RIKABI
Singapore plans to build a second liquefied natural gas (LNG)
receiving terminal as it pursues a long-term strategy to
become Asias LNG trading hub.
The city-state, which generates more than 90% of its
electricity using natural gas, is studying locations on the
eastern part of the country for a new facility to support
industries and power plants, Prime Minister Lee Hsien Loong
said Tuesday at the official opening of Singapores
Singapore is trying to take advantage of its geography and
stature as Asias oil-trading center to also become a
leader in LNG. Asia has overtaken Europe
as the worlds biggest
gas importer, accounting for 46% of global trade, according
to the International Energy Agency, which cites Singapore as
best-placed to be the hub for liquefied natural gas.
It is signaling a confidence that the government feels
it can play role in the regional LNG market, said Tony
Regan, a Singapore-based energy consultant at Tri-Zen
International Inc. Just talking about it is to capture
the attention of the traders and say, look, Singapores
The Southeast Asian nations first terminal alone has
capacity to handle about three times as much gas as Singapore
consumes. The city imported its first LNG cargo in March 2013
to inaugurate its 3 million tpy receiving facility on Jurong
Island. A third tank has been completed, doubling capacity to
six million tons, Lee said today.
Just mooting the second terminal is very visionary.
This is long-term planning, said Regan, who expects the
not to be operational
until 2025 or 2030. Its going to make sure it has
enough capacity to play in the regional market, not just the
A fourth tank will be added at the original site, taking
capacity to at least 9 million tpy by 2017, the Prime
Minister said. The terminal can accommodate as many as seven
tanks with a total capacity of 15 million tpy, he said.
LNG meets about 20% of the countrys natural gas needs,
according to Sriram Narayanan, the commercial director at
Singapore LNG Corp., which operates the Jurong Island
We are preparing for the possibility that our demand
for natural gas may one day be met entirely by LNG, Lee
BG Group won the contract in 2008 to supply 3 million tons of
LNG to Singapore annually over 10 years starting last year.
The company had committed 2.6 million tpy by August 2013, it
said on its website. A second license to supply the Asian
city-state with 1 million tons through 2018 will be awarded
by the regulator, the Energy Market Authority.
Southeast Asias gas demand will rise 184 billion cubic
meters by 2018, up about 19% from 2014 levels, compared with
11% growth in global consumption, the Paris-based IEA
estimated in its medium-term gas report in June last year. By
contrast, Chinas needs will increase by 56% to 294
billion in the same period.
About 59 million metric tons of LNG, or 25% of the 236
million tons sold globally, were traded as short-term or spot
cargoes in 2012, unchanged from the year before, according to
an annual report by International Group of Liquefied Natural
Gas Importers. Asia accounted for 71% of global demand.
Companies have lined up to tap Singapores market.
Germanys E.ON, Glencore Xstrata and others have hired
LNG traders in the city. Qatar Liquefied Gas Co., the
worlds largest producer, is looking to expand in the
region, Abdulla Al-Hussaini, the companys marketing
director, said in an October interview.
Ltd., the countrys
biggest gas distributor, will allocate 1 million tons of the
fuel from the US for trading at its Singapore unit, Chairman
B.C. Tripathi said in an interview Oct. 29.
Temasek Holdings, Singapores state-owned investment
company, set up Pavilion Energy in April to trade LNG.
Pavilion has a contract for 500,000 tpy for 10 years starting
in 2018 from an unidentified Europe
Spot LNG for Northeast Asia is trading near a record high.
Prices for cargoes to be delivered over the next four to
eight weeks were $19.60/MMBtu, Energy Intelligence Group said
Feb. 17 on its website.