Singapore plans LNG imports to meet demand


Singapore: Singapore has decided to go ahead with liquefied natural gas (LNG) imports to meet future energy demand and ease its dependence on piped supplies from Indonesia and Malaysia, the trade minister said yesterday.
"We need to diversify our energy sources in order to ensure that we are not over-reliant on a single source for our energy needs," Lim Hng Kiang told an energy forum organised by the Energy Market Authority (EMA).
"As such, the government has decided to import liquefied natural gas to meet future rising demand for energy as our economy expands and our population increases."
A study prepared by Tokyo Gas Engineering commissioned by the EMA has recommended building an LNG terminal to receive 3 million tonnes per year (tpy) by 2012.
The EMA said in a report released yesterday that it sees the politically stable Australia as the preferred supplier. This would help to strengthen the hand of LNG marketers such as Australia's Woodside Petroleum and US major Chevron that have found it tougher to sell LNG to China and India due to higher prices. Other potential suppliers are Qatar and Iran, the EMA said.
The terminal is expected to cost about $500 million, Lim said. Industry sources said the funding could partly come from the city's power plants that dominates Singapore's natural gas consumption and the overall project would cost more if investments in LNG tankers were taken into account.
"This is a very big investment. There is some uncertainty over the demand. This is a very lumpy investment. If the market feels core investment is needed from the government, we will seriously look at it," Lim told reporters after his speech.
Singapore, whose economy is forecast to grow five to seven per cent this year, has long sought to diversify its gas supplies, all of which come via three pipelines from Indonesia and Malaysia to fuel 80 per cent of the island's power generation that is growing at more than four per cent a year.