Natural gas is increasingly coming to be seen as a clean alternative to conventional fossil fuels such as coal and fuel oil due to its relatively clean-burning characteristics and its low cost. Natural gas also has a significantly higher power density than other renewable energy sources such as biofuel or solar power for example.
LNG is becoming more popular as a result as it is a very cost effective way of bringing remote natural gas resources to market. The Asia Pacific region has been a major driver of this growth, with buyers from Japan and South Korea importing LNG from producers in Qatar and Australia; increasingly, the growing economies of China and India are starting to import LNG shipments as well now.
Singapore currently uses natural gas to generate up to 80% of its electricity needs. Over a decade ago, 70% of Singapore’s electricity needs were generated using fuel oil. This trend towards a gas-powered economy is continuing apace with more capacity being added.
Singapore also creates value across the whole chain of LNG activities. In this way, Singapore can offer LNG ship repairs and refurbishments through its shipyards. Indeed two local companies, Keppel and Sembawang, actually specialise in LNG repairs and refurbishment. Sembawang shipyards have repaired 75 ships in the last four years and Keppel actually carried out the first LNG carrier to FSRU conversion back in 2007.
Singapore is already a major commodities trading hub, and though the country does not possess any oil reserves, it is Asia’s number one oil trading centre. LNG spot trading has increased significantly in recent years and long term contracts are becoming increasingly flexible, Singapore is therefore an attractive location for LNG trading and companies such as ConocoPhillips and Gazprom have already set up their trading offices in the city.
Singapore is also in the process of building its own LNG terminal on Jurong Island, the terminal will have two 180,000 m3 storage tanks and an initial capacity of 3.5 million tpa. This terminal is a very significant development as it dramatically increases the range of services that Singapore can offer. The terminal will be able to offer LNG vessels cool-down services, as well as offering storage and reloading services to companies, an activity which will improve the atmosphere for LNG trading.
There are also plans in place to expand the Jurong Island terminal with an additional four to five storage tanks which would increase capacity by up to 9 million tpa, so that the terminal can adapted to provide a wide range of services to suit future needs of the LNG industry. So Singapore is gradually building up a portfolio of services, which should allow it to develop into an LNG trading hub.
This article is based on the opening remarks by Mr Lawrence Wong, Chief Executive, Energy Market Authority, at the World LNG Series (Asia-Pacific Summit) 21 September 2010.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/23092010/singapore_to_become_major_energy_hub/