SINGAPORE: Singapore’s success as an evolving Asian LNG trading hub will likely rely on the growth of the small-scale LNG market in southeast Asia over the medium term.
The market size for southeast Asia is forecast to grow by around 71mtpa by 2035 in an annual LNG outlook that Anglo-Dutch energy major Shell published in March 2018.
Southeast Asia will become a net LNG importer by 2035, with Indonesia – the largest economy in the region – alone requiring 30mtpa by that year, Shell said at an industry event on 8 March.
Many companies see the region as key to creating new LNG demand.
Shell, Singapore-based Pavilion Energy as well as Japanese utilities Osaka Gas and Tokyo Gas are among those that have invested and signed collaboration agreements to develop the southeast Asian market.
Small LNG vessels are needed to deliver to the remote areas not linked to a gas grid. An ideally placed receiving terminal that can break conventional-sized cargoes into smaller volumes to supply those areas is at an advantage.
The Singapore LNG (SLNG) terminal is being heavily promoted as that connection point for southeast Asia. Singapore is already providing break-bulk, bunkering and reloading services.
Infrastructure expands
SLNG will expand its annual regasification capacity to 11mtpa when its fourth 266,000 cubic metre (cbm) storage tank comes on line in the second quarter of 2018. The terminal currently operates three 188,000cbm tanks – one of which can conduct reloads.
The second quarter of 2018 will see SLNG open terminal access to multiple third parties.
The Energy Market Authority (EMA) has allowed companies to import spot LNG into Singapore from 2018, but total quantity is capped at 10% of Singapore’s long-term contracted pipeline gas and LNG supply.
The terminal is also adding a Wobbe Index correction facility that will allow importers to change the LNG specifications to meet any domestic or re-export requirements.
On the business front, Singapore is already a thriving hub, where an estimated 45 LNG buyers, portfolio suppliers and traders have set up shop to trade.
This number will continue to grow, with a number of Chinese buyers having indicated interest in establishing operations in Singapore.
