The present global demand for LNG is to the tune of 250 million tons per annum is projected to rise to 400 million tons a year within the next two decades. The demand in Asia Pacific countries is projected to surge rapidly. This is bound to create huge opportunities for a strategic location like Singapore. And it has started taking systematic efforts and competing and contending to become Asia’s hub for liquefied natural gas (LNG). Natural gas-fired power plants offer reliable electricity generation which is not affected by weather patterns like wind energy and solar energy is. Coal is less favoured these days as it contributes to greenhouse gas emissions, whereas gas produces significantly less greenhouse gas emissions compared with fossil fuel plants. Singapore LNG Corporation has been building up its infrastructure to seize opportunities in the Asia Pacific, as this region accounts for 70% of global gas demand.
The Country’s government wants to increase the vibrancy of the Singapore gas market and have a very strong regional footprint. One of the major steps taken was to dramatically widen the supply options. So far the natural gas was being imported here from Indonesia and Malaysia, but shipments will now come from the United States, Australia, Norway, Russia, Qatar and Brunei too. Singapore has picked up Royal Dutch Shell Plc and Pavilion Gas Pte Ltd. as its next suppliers. These two companies will have exclusive rights to sell 1 million metric tons of LNG annually for up to 3 years, with imports beginning in 2017. These new sources of supply will be made by the development of specially designed ships which will carry natural gas in liquefied form, as against to the traditional method via pipes from neighbours close by.
Singapore LNG’s terminal on Jurong Island houses three LNG tanks with a total storage capacity of 540,000 cubic meters. The terminal is constructed in such a fashion that capacity can be expanded to seven tanks to a total capacity of 800,000 cubic meters. The company is also further studying the possibility of introducing services such as storage and send-out export, LNG trucking and nitrogen blending of regasified LNG.
At present, Singapore has more than 25 LNG trading desks and it is estimated that about 2,000 cargoes transit near the country each year. The recent plunge in commodity prices over the past two years has prompted changes in the LNG market, allowing for an expansion of the spot market. Singapore is also thinking of allowing third party imports in the country allowing the further rise in trade.