SINGAPORE - Minister of Trade and Industry S Iswaran on Wednesday (Oct 26) highlighted several new policy initiatives which Singapore has undertaken to improve the flexibility and diversity of Singapore's liquefied natural gas (LNG) supply.
The Republic's new tranche of LNG imports will come from the US, Australia, Norway, Russia, Qatar and Bunei, he said, adding that "the diversity of supply will further strengthen our energy security."
He was speaking at the Gas Asia Summit at the Marina Bay Sands Convention Centre.
Mr Iswaran emphasised that flexibility and diversity were Singapore's objectives in securing its LNG supply.
He had announced earlier this week that Pavilion Gas and Shell have been appointed as the term importers for Singapore's next tranche of LNG.
They were given the contracts as they offered gas buyer more flexibility through options for shorter contract durations and alternative pricing indices to oil indexation, he said.
He added that Singapore is reviewing feedback from the industry that it would be better to allow spot imports of LNG on a first-come-first-serve basis, subject to a market-wide cap, to provide greater flexibility for buyers.
The Energy Market Authority will consult the industry for a second time this quarter, he added.
A domestic Secondary Gas Trading Market is also being developed to provide more flexibility for gas buyers, Mr Iswaran added.
He said that the EMA has completed the first phase of detailing a road map to implement the domestic trading market and an industry group will commence discussions on details to initiate the SGTM early next year.
In the area of infrastructure development, Singapore will expand the throughput capacity of the LNG terminal on Jurong Island from 6 million tonnes per annum (Mtpa) to 11 Mtpa by early next year.
He added that Singapore is studying options to enhance energy security through the potential development of a second LNG terminal.
The Asian gas market has been projected by analysts to remain soft until the end of the decade due to weaker than expected demand in the region, as well as oversupply of LNG.
This is despite Asian prices of LNG, which used to be much higher than American and European prices, coming down significantly.
Mr Iswaran warned the prospect of diminishing investments as investors scale back on projects has far-reaching implications.
"The industry needs to re-establish a healthy equilibrium; if not, sustained under investment will have adverse long-term consequences on energy security and pricing."