Singapore Starts Building Country's First LNG Terminal
Singapore began construction of its first liquefied natural gas import terminal Wednesday, which will help diversify the city-state's energy portfolio and drive regional trade of the cleaner-burning fuel, said a senior minister. Government officials say global LNG players are acknowledging Singapore's geographical advantage as a possible catalyst to make it a regional trading hub for LNG. In recent months, Russia's Gazprom (GAZP.RS) has opened a Singapore office to oversee its LNG trade operations in the region, while ConocoPhillips (COP) has decided to relocate its global LNG headquarters to Singapore from Houston.
"This LNG terminal facility will be the first open-access multi-user terminal in Asia. It will be capable of importing and re-exporting LNG from multiple suppliers," S. Iswaran, senior minister of state for trade, industry and education, said in a written speech.
"One possibility is to develop Singapore as a center for LNG trading in Asia," he said.
South Korea's Samsung C&T Corp. (000830.SE) has been awarded the construction and engineering contract for the terminal, which will be able to import 3.5 million metric tons of LNG a year beginning in the first half of 2013. The project, valued around S$1.5 billion, will be located at a 30-hectare site on Jurong Island.
It will have two storage tanks that will each hold up to 188,000 cubic meters of LNG and depending on requirements, four more tanks can be built at the site, a senior government official said earlier.
BG Group PLC (BG.LN) won exclusive right in 2008 to ship up to 3 million tons a year of LNG to Singapore, with possible supplies coming from its Australia coal seam gas project that will start production in 2014.
Singapore's Energy Market Authority earlier said BG plans to initially ship about 1.5 million tons a year and its contract will end once it reaches shipments of 3 million tons a year or until 2023, whichever comes first.
Apart from supplying gas locally, the Singapore terminal aims to provide storage space for cargoes during the low-demand summer season for resale in winter, when demand is higher.