SINGAPORE - Singapore will have a new liquefied natural gas (LNG) terminal by the end of this decade, boosting supplies of the fuel to a level where power plants here can generate electricity even if piped gas from neighbouring countries is not available, said Deputy Prime Minister Lawrence Wong.
It will be Singapore LNG Corporation’s (SLNG) second terminal and will have a throughput of up to five million tonnes per annum (mtpa) – about half of the existing terminal’s 9.6 mtpa capacity. SLNG is studying the idea of having a floating storage and regasification unit (FSRU) as the new terminal. An FSRU is a ship with onboard facilities to turn LNG into its gaseous form which will be piped onshore to Singapore’s gas grid.
“With a second terminal, Singapore will be able to meet our power-generation needs entirely with LNG, if necessary,” said DPM Wong, speaking at the company’s 10th anniversary gala dinner on Tuesday at the Sands Expo and Convention Centre.
He added that this is unlikely to happen any time soon as Singapore will continue to have access to piped natural gas.
SLNG said an FSRU offers greater flexibility in meeting the nation’s energy security and sustainability objectives, as it could be easily redeployed to another location as a receiving terminal, if necessary. The current SLNG terminal on Jurong Island is an onshore facility.
The company is aiming to have the second terminal operational by the end of this decade.
The move comes a day after Minister for Trade and Industry Gan Kim Yong announced that the Republic will establish a new entity that will centralise the procurement and supply of gas for the power sector by aggregating gas demand from the power-generation companies, or gencos.
Natural gas plays an important role in Singapore’s energy mix – it powers around 95 per cent of the country’s electricity supply. Most of it is piped from Malaysia and Indonesia, but an increasing amount is now being shipped in liquefied form from places as far as the United States, Qatar and Australia.
The moves to add a new terminal and centralise purchases were needed after both piped and LNG prices went on a roller-coaster ride in 2022 in the wake of Russia’s invasion of Ukraine. Record-high prices stoked worries about fuel supply security as European buyers replaced Russian piped supplies with LNG, cutting into the share of supplies headed to Asia.
Mr Tan Soo Koong, chief executive of SLNG, said: “I am delighted and proud that SLNG has been given the approval to develop this strategically important project, which will considerably enhance Singapore’s energy security.”
He said the new terminal project is testimony to the important role that SLNG will continue to play in Singapore’s energy security in the next decade and more.
DPM Wong said demand for natural gas – the least polluting fossil fuel – will continue to increase not only in Singapore but also across Asia, where coal remains the biggest source of energy.
However, with the ongoing war in Ukraine and the recent flare-up of hostilities in the Middle East, Singapore must brace itself for continued disruptions in the global energy market.
Mr Wong said: “Asia became a net importer of LNG in 2021, and that trend is likely to continue over time; all of which means the regional and global LNG market will remain tight over the foreseeable future. Singapore must start planning ahead to secure our own supply of LNG.”
He added that the decision to centralise the procurement and supply of gas to the power sector will enable Singapore to balance the different considerations for price competitiveness and security of supply.
“We will have economies of scale to negotiate more favourable contracting terms; to procure gas from diverse sources and also with different contract durations; and to optimise our natural gas portfolio at the national level,” he noted.
Mr Wong said SLNG’s first terminal – which began operations in 2013 – also helped boost LNG trading in Singapore, creating many opportunities and jobs for Singaporeans in trade and complementary services such as ship brokerage and other professional services.
Singapore hosts about 60 LNG traders, including the world’s top 10 operators. About US$240 billion (S$327 billion) worth of LNG trade flowed through Singapore in 2022.
