Singapore could be deploying its first two floating liquefied natural gas (LNG) units in the years to come as a means of meeting the country's energy needs.
The Energy Market Authority (EMA) has already singled out two sites where floating storage and regasification complexes or other equivalents could be berthed.
A feasibility study will be conducted on whether the sites are suitable, according to a tender document on government e-procurement portal GeBiz earlier this month calling for consultants to undertake the assessment.
A floating storage and regasification unit stores or converts LNG back into gas before transferring it onshore via a pipeline. It is typically cheaper and quicker to build than a land-based LNG-receiving terminal.
The tender document said the floating solutions are to be used either as permanent infrastructure to meet Singapore's growing gas demand or as a "quick-to-deploy" option that can be activated at short notice to increase the country's LNG import capability.
This could mean greater gas capacity for Singapore, in addition to the $1.7 billion LNG terminal on Jurong Island.
The terminal began operations in May 2013 and is slated to expand its throughput capacity from the current six million tonnes annually to around 11 million tonnes by 2018. Plans for a second LNG terminal are also under way.
The EMA noted in the tender that the consultant should also come up with assessment criteria that would allow it to determine if more sites can be studied and used to deploy similar floating solutions. This indicates that the authority is open to housing such facilities at more than two sites.
The tender will close on May 27.
An EMA spokesman told The Straits Times in a separate statement that Singapore's gas demand could expand by 6.9 million tonnes annually by 2025, up from the current 10 million tonnes, largely on the back of growth in the power generation as well as petrochemical and refinery industries. "As part of our infrastructure planning, EMA is studying various options to meet our long-term gas demand and to enhance energy security," he said. "We will better be able to assess our options upon conclusion of this high-level feasibility study."
Industry players agreed that such floating solutions would play a key role in helping Singapore beef up its energy security, even as today's gas demand is growing at a slower pace than expected.
Most of Singapore's gas supply - which powers about 95 per cent of the country's electricity - comes from Malaysia and Indonesia via offshore pipelines as well as from the Jurong Island LNG terminal.
Ms Michelle Neo, senior analyst for gas at energy consulting firm FGE, said the existing supply contracts for piped gas from Malaysia are expected to expire in 2019, and in 2023 in the case of Indonesia.
"If the floating solution were to be implemented today, it would be questionable," she said. "But it's about planning for the future. A floating LNG solution would be a quick-to-deploy solution which can ensure energy security."
Ms Alexis Aik, the firm's managing director of global gas/LNG, believes the floating solutions could be deployed in the western or eastern areas of the island which are heavily populated by industrials.
She noted that such facilities would also allow Singapore to get around the issue of space constraints, leaving land to be put aside for industrial or commercial purposes instead.
Galway Group president Karthik Sathyamoorthy said the floating solutions would also be a huge boost to Singapore's aspiration to become Asia's LNG trading hub and as it readies for LNG bunkering.
"For this hub status to really take off, you'll need terminal capacity, and the next step is (to invest in) infrastructure," he said.
Correction note: An earlier version of the story stated that the tender for the sites closed on Wednesday. This is incorrect. The tender will actually close on May 27. The earlier article also stated the piped gas from Indonesia was expected to expire in 2013. This is incorrect. The piped gas from Indonesia is expected to expire in 2023. We are sorry for the errors.