Singapore LNG terminal to add fourth storage tank, Minister Iswaran announces

Photo Credit: EMA

A fourth liquefied natural gas (LNG) storage tank will be built at Singapore's new LNG terminal, S Iswaran, the country's Second Minister for Home Affairs and Trade & Industry announced at the opening of the Gas Asia Summit, part of Singapore International Energy Week, this morning.

The terminal on Jurong Island will initially begin operations in the second quarter of 2013 with two LNG tanks providing a throughput capacity of 3.5 million tonnes per year (Mtpa). A third tank was already scheduled for completion in the fourth quarter of 2013, bringing throughput capacity to 6Mtpa.

Minister Iswaran, who also serves as a Minister in the Prime Minister's Office, said the fourth tank would boost the capacity of the LNG terminal to about 9Mtpa.

He told the Gas Asia Summit audience: "Demand for gas is expected to grow in tandem with our economy in the years ahead. As the cleanest fossil fuel that can now be procured from diverse supply sources, LNG is set to play an increasingly important role in Singapore's energy mix.

"Hence, we must plan ahead to ensure that our infrastructure can cater to our future energy needs. This fourth tank will enhance our energy security by allowing further diversification of our fuel sources. The additional capacity will also allow us to respond to new opportunities in global LNG markets."

Minister Iswaran highlighted the growing importance of LNG in Singapore's energy mix and the need to ensure "a continued supply of reliable and affordable energy to fuel our economic growth". Singapore currently meets its LNG needs through pipeline gas from its neighbours, but the new LNG terminal will diversify its sources.

The Minister said the LNG take-up rate ahead of the terminal's opening has been faster than originally anticipated and that power generation companies have already committed to purchasing around 2.7Mtpa of LNG. This represents some 90 percent of the 3Mtpa franchise of appointed aggregator BG.

Minister Iswaran explained that the increased storage infrastructure created by the fourth tank could also catalyse business opportunities such as LNG trading, break-bulk services and LNG bunkering.

He said: "Over the last few years, global energy players including Shell, BP and Gazprom have established trading desks in Singapore. The fourth LNG tank will further spur the growth of such LNG-related businesses, which bodes well for the emergence of a more vibrant LNG industry both in Singapore and in Asia."

Noting the first-ever Gas Asia Summit's theme of "The Role of Natural Gas and LNG in the Race to Fuel Asia", Minister Iswaran told delegates that the advent of unconventional gas in the US has caused a paradigm shift in global gas markets. This is "challenging industry leaders and policymakers to revisit, and perhaps revise, long-held assumptions and assess the impact of these developments on Asian economies".

For a full transcript of Minister Iswaran's Opening Keynote, please visit here.

By :EMA staff, additional reporting by Andrew Seah