2017 Apr 21

Singapore steps up LNG plans

Singapore’s plans to develop its liquid natural gas (LNG) import and storage capabilities are part of a strategy to secure greater energy independence while also putting it in a position to exploit expected future opportunities for regional LNG trades.

In addition, the Maritime and Port Authority of Singapore (MPA) is implementing plans to inaugurate LNG bunkering in the port, with trial operations due to start this year as soon as the first specialist LNG bunkering vessel enters service.

In October 2016 Singapore’s Energy Market Authority (EMA) awarded Pavilion Gas and Shell Eastern Trading licences to import LNG into Singapore following a selection process. Under this arrangement Pavilion Gas and Shell Eastern will start importing LNG into Singapore in 2017 under exclusivity contracts allowing them to import up to 1 million metric tonnes per annum (Mtpa) of LNG, or for up to three years, whichever comes earlier. This was the second tranche of LNG import licences under proposals launched in 2014 to secure LNG supplies.

Singapore minister for trade and industry, S Iswaran commented when the latest contract was awarded: “The uncertainties in the global oil and gas markets further underscores the need for Singapore, as a small open economy with no indigenous energy resources, to enhance the competitiveness and security of our natural gas supply, which is a key energy resource for us.” He said that the contracts will meet demand beyond the initial franchise and complement piped sources of LNG.

“These two companies were selected on the basis of the reliability, flexibility and competitive pricing of their LNG supplies. They have also secured strong support from buyers. Buyers have been offered shorter-term contracts and alternate price indices, such as Henry Hub and SGX’s LNG Index Group, Sling.”

In addition, EMA plans to allow third party spot imports and new piped natural gas imports on a case-by-case basis. “This will further augment the diversity of gas supply sources in Singapore.”

The minister said that LNG imports could come from a variety of LNG export countries, including the USA, Australia, Norway, Russia and Qatar, as well as sources closer to home such as Brunei. “Diversity of supply will strengthen our energy security.”

The strategy behind this policy of increasing LNG imports by sea is to reduce Singapore’s dependence on LNG piped via Malaysia and also to develop its role as an LNG regional hub. This recognises the substantial potential for small-scale LNG operations in the region, in particular in neighbouring Indonesia which is looking to create a network of small-scale LNG facilities throughout its extensive islands. Several vessel operators in Singapore are eyeing opportunities to build and operate small-scale LNG vessels to meet this demand.

Pavilion Energy is also working with ExxonMobil to develop LNG bunkering and other downstream LNG projects in Singapore. When this collaboration was announced in September 2016, Pavilion Energy chief executive Seah Moon Ming referred to other potential LNG projects as including regional small-scale LNG. He commented that there are opportunities to find new areas of LNG demand and specifically small-scale LNG in Southeast Asia. He described Indonesia and the Philippines as good starting points for small-scale LNG projects.

EMA is looking at the feasibility of deploying floating LNG solutions for importing LNG, either in the form of permanent structures or as shorter-term solutions to enable LNG import capabilities to be stepped up more quickly. It is considering two potential sites for locating floating storage and regasification units. EMA has indicated that it is looking to increase Singapore’s LNG imports by about 7 million tonnes annually by 2025, increasing annual LNG imports from their current level of about 10 million tonnes.

Existing LNG import facilities comprise three berths and storage facilities operated by Singapore LNG Corp (SLNG) at Jurong Island, with developments there aimed at increasing annual import capacity to 11 million tonnes in 2017. The possibility of building a second land-based LNG import terminal in Singapore is under discussion.

In October 2016 SLNG awarded LNG terminal specialist consultancy KBR a contract to conduct a feasibility study for the expansion of the existing LNG terminal. Under the terms of the contract, KBR will provide feasible conceptual solutions and create a design option that could be scalable in the long run. The study is expected to be completed in March or April 2017.

Greg Conlon, KBR president Asia Pacific, said: “Singapore’s first LNG Terminal in Jurong Island is a strategic and critical national infrastructure. Together with SLNG, KBR is excited to help advance the growth of the energy market and LNG hub in Singapore and support SLNG’s vision of being a world-class terminal operator.”



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