Singapore Govt mulls expansion of LNG terminal
February 14, 2012
Govt mulls expansion of LNG terminal
By RONNIE LIM
(SINGAPORE) Following strong user interest from numerous industry players, Singapore is considering expanding the $1.7 billion Singapore liquefied natural gas (SLNG) terminal – adding two more storage tanks to the three being built there – even before the Jurong Island facility starts up in the second quarter of 2013. Going by industry estimates, the two additional tanks could cost US$400 million.
Added storage: Two more tanks could be added at an additional cost of US$400m
A decision on the expansion could be made in the coming 12 months, S Iswaran, Minister in the Prime Minister’s office and Second Minister for Trade & Industry and Home Affairs disclosed yesterday.
The move comes as the appointed LNG aggregator, BG Group, has sold 2.65 million tonnes per annum (tpa) to power plants and industries here, or close to 90 per cent of its franchised volume of three million tpa – which it is expected to hit by 2013.
With growing domestic gas demand, plus the entry of numerous LNG producers and trading houses in anticipation of a regional LNG trading hub emerging here, Singapore is studying how it can best secure LNG supplies beyond that.
McKinsey & Co are working on a possible future LNG import framework for Singapore and Mr Iswaran said the Energy Market Authority will issue a consultation paper next month to gather industry and public feedback on the findings.
‘The consultation exercise involving industry players, stakeholders, and the general public has to take into account various factors including technical limitations here and interests from diverse parties. Most importantly, it has to ensure a competitive market, so that LNG can be competitively priced.’
Mr Iswaran who was visiting the SLNG terminal stressed that the project was a key part of Singapore’s energy diversification effort as it ‘will allow us access to gas supplies around the world, not just geographically, but also to tap unconventional gas, like shale gas that is being discovered’.
He said, ‘SLNG is well on track to start operations in Q2 next year, taking us to 3.5 million tpa processing capacity, which in itself will fully accommodate the BG franchise. Beyond that, additional jetties as well as a third storage tank by Q1 2014 will take us to six million tpa.’
This will allow for some additional spot cargoes into the Singapore terminal by that stage, industry officials said. But given the strong demand, SLNG will have to start looking beyond having just a third tank soon. Its masterplan provides for up to seven tanks.
Groundbreaking of the SLNG terminal first took place in March 2010, which means that the first phase of the terminal, including the first two tanks, will take three years in all to build.
Noting this, Mr Iswaran said that ‘as the lead time is quite significant, we really need to make a decision (to expand) beyond the first three tanks in short order’.
Asked by BT whether this could be made in the coming year, he said: ‘Quite possibly. But it also depends on what the consultation exercise yields and EMA’s own assessment of demand patterns and how things are evolving.’