SINGAPORE - Singapore is seeking to appoint two additional liquefied natural gas (LNG) importers to add to the four already supplying the city-state, in a bid to boost energy security amid surging global energy prices.
The Energy Market Authority (EMA), which issues licences for importers, said on Thursday (May 19) that it has started the process to invite companies to submit their proposals to supply Singapore with the fuel.
These submissions will be evaluated based on the ability of potential suppliers to provide reliable, secure and competitive supply of LNG to Singapore.
Proposals must be submitted by July 8.
The EMA said that the move will enhance competition and provide more options for gas buyers.
The new entrants will join Pavilion Energy Singapore, Shell Eastern Trading, ExxonMobil LNG Asia-Pacific and Sembcorp Fuels (Singapore) as importers.
The country's plans to import more LNG come as no surprise as contracts for piped natural gas from Indonesia are due to expire before the end of the decade.
“The additional import licences will look to ensure energy security and competitive consumer pricing. It will also help to develop Singapore as a trading hub and support the growth of other LNG-related services like bunkering,” said Singapore-based Hengky, a senior LNG analyst at Refinitiv, a unit of the London Stock Exchange Group. He is Indonesian and has a one-word name.
Singapore aims to position itself as an LNG trading hub for Asia as it seeks to capitalise on an expected rise in imports in the region, driven by depleting gas production and growing electricity demand.
In a recent interview with The Straits Times, Mr Bas Verkooijen, chief executive of German storage operator Oiltanking’s new subsidiary Advario, said the company is mulling over plans to develop an LNG terminal in Singapore.
Natural gas is used to produce around 95 per cent of the Republic’s electricity, and will continue to be a dominant fuel for the country’s electricity generation, EMA said.
Analysts say the decision to try and lock in long-term supply will help provide some level of price certainty in a whipsawing market.
“What’s worse than high energy prices is uncertain energy prices. And in this situation, it’s fairly reasonable to assume that prices won’t come down quickly,” said Mr David Broadstock, senior research fellow and head of the energy economics division at the National University of Singapore’s Energy Studies Institute.
“Everyone’s trying to rush to get the natural gas, and Singapore’s move at this point is understandable. Strategically, it’s a clever move.”
The invasion of Ukraine by Russia, Europe’s top gas supplier, has prompted the European Union to rethink its energy policies amid sharpened concerns of supply shocks.
