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  Business Times 5 Sep 07
LNG imports may find many takers
Industry players give thumbs-up to new energy initiative

By Ronnie Lim

Business Times 5 Sep 07
$1b LNG terminal in place by 2012
PowerGas to operate facility; RFP launched for sole importer to service energy needs
By Ronnie Lim

Today Online 5 Sep 07
PowerGas to build 1st LNG terminal here

Straits Times 5 Sep 07
$1b LNG plant to help secure fuel supply
PowerGas to build and run terminal, which will cut reliance on piped gas
By Nicholas Fang

Channel NewsAsia 4 Sep 07
PowerGas to build and operate Singapore's first LNG terminal


SINGAPORE: The Energy Market Authority has designated PowerGas, a wholly owned subsidiary of Singapore Power, to build and operate Singapore's first Liquefied Natural Gas (LNG) terminal.

PowerGas will build the terminal on a 30-hectare site which is currently being reclaimed on Jurong Island. Construction is expected to begin in 2009, and the terminal should be operational by early 2012.

Minister of State for Trade and Industry, Mr S Iswaran, announced this at the LNG Supplies for Asian Markets 2007 Conference on Tuesday.

The terminal will have a send-out capacity of three million tonnes a year in its initial phrase.

According to Quek Poh Huat, CEO of Singapore Power and chairman of PowerGas, the terminal will be able to ship LNG from overseas countries, which will diversify Singapore's sources of energy.

Mr Quek also added that PowerGas will work in sync with the LNG terminal in providing gas.

"The operation of the terminal will be a natural fit with PowerGas' existing role as the terminal will be an extension of this network."

PowerGas is the gas transporter and system operator in Singapore which transports natural gas to power generation companies and industrial customers, as well as town gas to commercial and residential customers. CNA/yb

Today Online 5 Sep 07
PowerGas to build 1st LNG terminal here

PowerGas, a subsidiary of Singapore Power, will build the nation's first liquefied natural gas (LNG) import terminal to reduce reliance on supplies from Indonesia and Malaysia.

"There are clear synergistic benefits for PowerGas to operate the LNG terminal, given its current role as the gas transporter and system operator in Singapore," said Minister of State and Industry for Trade S Iswaran yesterday.

"PowerGas will be able to ensure that the operation of the terminal, which is strategic and critical, is efficiently integrated with the gas pipeline network. PowerGas will also be able to manage periodic demand and supply imbalances in the gas network by adjusting gas supply from the LNG terminal."

The Government will invite bids from investors to supply the gas and jointly develop the terminal with PowerGas, Mr Iswaran added. The supplier for the terminal will be decided by the second quarter of next year. PowerGas is unlikely to participate, he said.

Singapore gets 80 per cent of its electricity from natural gas imported via pipelines from Malaysia and Indonesia. LNG is natural gas chilled to liquid form for transportation by tanker to destinations not connected by pipeline. On arrival it is turned back into gas for delivery to users.

The terminal on Jurong Island will have a capacity of 3 million metric tonnes a year. Singapore's demand, which Mr Iswaran estimates at 1 million tonnes a year in 2012, may grow to that level by 2017-2018. AGENCIES

Straits Times 5 Sep 07
$1b LNG plant to help secure fuel supply
PowerGas to build and run terminal, which will cut reliance on piped gas
By Nicholas Fang

SINGAPORE took a major step towards securing its energy supplies when it awarded a contract to build and run the Republic's first liquefied natural gas (LNG) terminal on Jurong Island.

Singapore Power subsidiary PowerGas will develop the $1 billion terminal on a 30-ha site currently being reclaimed on the south-western part of Jurong Island.

The LNG will be a major source of fuel for electricity generation plants, here which have relied heavily on piped natural gas from countries such as Malaysia and Indonesia.

But disruptions to piped gas supplies have caused power outages for Singaporeans since 2002.

For example, three years ago, a disruption in the piped gas supply from Indonesia's West Natuna to Singapore caused a blackout affecting 300,000 homes. This prompted widespread calls for LNG to be imported.

A year later, a feasibility study was commissioned to study the use of LNG here. The new terminal will process LNG, which will arrive by tanker. It will then be sold to power plants.

Construction is expected to begin in 2009, said Minister of State for Trade and Industry S. Iswaran yesterday.

The terminal will have a capacity of three million tonnes of LNG a year when it kicks off operations in 2012. This can be expanded to six million tonnes annually. Singapore's demand is expected to reach one million tonnes per year in 2012, with further growth to some three million tonnes over the next five years.

The Government last year made the decision to start importing LNG to cut Singapore's reliance on piped natural gas and to help meet rising demand for electricity.

Currently, about 80 per cent of Singapore's electricity is generated by natural gas imported via pipelines. The rest is from oil. LNG is natural gas cooled to liquid form and delivered by tankers from source countries all over the world, including Australia and Qatar.

Mr Iswaran said that there were clear benefits for PowerGas to operate the new terminal, given its current role as the gas transporter and system operator in Singapore.

Speaking at the opening of a conference on LNG yesterday, he said: 'PowerGas will be able to ensure that the operation of the terminal, which is strategic and critical, is efficiently integrated with the gas pipeline network. 'It will also be able to manage periodic demand and supply imbalances in the gas network by adjusting gas supply from the new terminal.'

He said that industry players with relevant expertise are welcome to partner PowerGas to jointly develop and operate the terminal.

The Energy Market Authority (EMA), which regulates the electricity and gas market here, is currently negotiating with PowerGas to procure its services to build and operate the new terminal.

Mr Iswaran also announced yesterday that Singapore would buy LNG through a single buyer or 'aggregator'. This is due to the small market here, and to ensure economies of scale.

The EMA yesterday launched a two-stage selection process to select the aggregator. Mr Iswaran said the EMA is open to different models, including individual firms and joint ventures between local and foreign players.

The successful aggregator will have an exclusive licence from EMA to import and sell LNG into Singapore until demand hits three million tonnes a year, after which it will be opened up again. The aggregator will consolidate gas demand from all users, buy LNG from suppliers and also enable LNG to be arbitraged against piped natural gas.

EMA expects to select an aggregator by the second quarter of next year.

Business Times 5 Sep 07
$1b LNG terminal in place by 2012
PowerGas to operate facility; RFP launched for sole importer to service energy needs
By Ronnie Lim

(SINGAPORE) The Republic yesterday unveiled major moves that will not just diversify its energy supply sources but also give it a foothold in a lucrative global business.

It has firmed up its plans to build a dedicated liquified natural gas terminal on Jurong Island at the cost of $1 billion, which will be owned and operated by PowerGas. The terminal could be operational by 2012.

At the same time, Singapore has launched a two-step request for proposals (RFP) from interested parties to bid to be the initial sole importers of LNG.

Singapore currently relies on natural gas piped from nearby Indonesia and Malaysia, but is seeking to diversify its sources as these countries have indicated that they may need more gas for domestic use.

LNG does not depend on pipelines and can be imported from anywhere in the world. It can then be converted again into gas for use by power stations as well as mega petrochemical plants here.

The Republic is also counting on the growing trend of spot-trading in LNG taking off.

Stressing the project's urgency, S Iswaran, Minister of State for Trade and Industry, told the media yesterday that construction, as well as detailed engineering, should start right away for the project, which was first given the green light in August last year.

Given a three- to four-year lead time to build the terminal, Singapore should be ready to start importing LNG from anywhere by 2012.

'Singapore is now ready for (the LNG) business,' Mr Iswaran told delegates at the LNG Supplies for Asian Markets conference. The move to have PowerGas, a Singapore Power subsidiary, lead the $1 billion terminal should help allay earlier industry concerns over who would spearhead the costly undertaking.

Operationally it makes sense, Mr Iswaran said, as PowerGas, currently in charge of the national gas pipeline grid here, can ensure that the LNG terminal is efficiently integrated with the pipeline system.

It can help manage periodic gas demand and supply imbalances by adjusting supply from the terminal.

'But we have left the door wide open for other parties, both local and international, to join in,' he added. Other industry players could partner PowerGas as minority stakeholders in the terminal.

The other important part of the LNG equation is appointing the gas importer. Just as importers need to be assured that the LNG terminal is in place for them to land their gas, the terminal operator also wants to know if gas is coming in by the time the facility is ready, said Mr Iswaran.

That is why the two-step RFP for the single importer/consortium (called the aggregator) was also launched yesterday.

This approach was chosen following industry feedback that it would be suitable, given the small market and low initial volumes purchased.

'LNG suppliers will find it easier and more attractive to deal with a single buyer who has a critical mass of demand,' he said.

The first stage RFP will help the potential aggregator - which can include joint ventures between local and foreign players, and even gas suppliers - to better understand the market here before they submit their plans.

'The crux of it is to engage the industry in this first phase and let them come up with creative solutions,' Mr Iswaran said.

In the second stage - expected to be announced in early January 2008 - the Energy Market Authority (EMA), the electricity and gas market regulator, will select and appoint the aggregator from the shortlisted candidates by the second quarter.

The aggregator will have an exclusive licence from EMA to import and sell LNG into Singapore up to an initial gas demand of three million tonnes per annum (tpa). Mr Iswaran said that when the LNG terminal starts up in 2012, initial demand is expected to be only one million tpa and it will take about four to five years, that is 2017, before the contracted LNG quantity reaches three million tpa. Once the three million tpa mark is reached, the LNG import trade will be opened up to others, he said.

Gas importers like Gas Supply Pte Ltd and Keppel Energy, as well as end-users like generating company Tuas Power gave a thumbs up to the measures and said that they were keen to take part in the LNG game. 'The RFP will encourage the most optimal, competitive solutions for LNG here,' GSPL CEO Tan Chin Tung said.

Business Times 5 Sep 07
LNG imports may find many takers
Industry players give thumbs-up to new energy initiative

By Ronnie Lim

(SINGAPORE) PowerGas, chosen to be the majority owner and operator of Singapore's LNG (liquefied natural gas) terminal, says it expects to begin construction proper in 2009, and get the facility operational by early 2012.

This will be after siteworks at the 30-hectare site on the south-western part of Jurong Island are completed by end-2008.

The terminal will have an initial capacity of 3 million tonnes per annum (tpa), with potential for expansion to 6 million tpa (if LNG trading here takes off).

Quek Poh Huat, group CEO of parent Singapore Power and chairman of PowerGas, said: 'The LNG project will diversify Singapore's sources of energy . . . the operation of the terminal will be a natural fit with PowerGas's existing role as owner and operator of Singapore's gas pipeline network, as the terminal will be an extension of this network.'

Meanwhile, reacting to the Energy Market Authority's (EMA) two-step Request for Proposals (RFP) for a sole LNG importer/consortium (or aggregator), gas importers like Gas Supply Pte Ltd (GSPL) - which currently buys natural gas from Sumatra - said it will definitely take part in the RFP to be an aggregator.

GSPL CEO Tan Chin Tung gave the thumbs-up to the Ministry of Trade and Industry (MTI) move to suss out the various ways to do this, saying it 'clearly wants the most competitive and credible option available to import LNG'.

Keppel Energy managing director Ong Tiong Guan said that KepCorp, which buys piped Malaysian gas for its new 500MW co-generation plant, is also interested in importing LNG. But, like GSPL, he said it will need to study the details.

A SembCorp spokesman said: 'SembCorp is a significant player currently supplying 40 per cent of the natural gas requirement for power generation. We will be interested to look at opportunities to increase our sources of supply to meet additional customer demand.' It currently buys Indonesian gas from West Natuna.

Lim Kong Puay, president and CEO of Tuas Power (TP), one of the three big gencos here being divested by Temasek Holdings, said that 'as a major end-user for gas, we will consider taking a stake in the aggregator for LNG. 'This is especially as we will need more gas for our new projects,' Mr Lim added, referring to TP's plans to also go into the co-generation business with a new plant on Jurong Island to supply utilities like steam and water to petrochemical customers.

The move to have a sole buyer or LNG aggregator initially 'makes a lot of sense', Mr Lim said. This is because the initial volumes purchased by Singapore will be small, and a single buyer with a larger order will more likely secure a better pricing than multiple buyers with smaller orders. 'You won't be able to negotiate from a position of strength otherwise,' Mr Lim added.

But another industry player disagrees, saying that most LNG buyers take up at least one LNG train's worth, or 5-6 million tonnes, so there really isn't a need for an aggregator at the moment given the small initial volume of one million tonnes needed come 2012.

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