LNG T2 likely to be similar in size as Jurong Island's

[SINGAPORE] The Republic's second LNG terminal - which may be built in the east - will likely be of "similar size" to the current Jurong Island facility to ensure that the Republic can meet its gas needs going forward, said Energy Market Authority's (EMA's) chief executive, Chee Hong Tat.

"While we haven't decided where, exactly how many (storage) tanks, or how big it will be, I would think that it will be of similar size to provide sufficient LNG capacity for Singapore to meet its long-term gas needs," he indicated to participants at an LNG conference here yesterday.

His remarks follow Prime Minister Lee Hsien Loong's announcement at this week's opening of the Singapore LNG terminal that the government intends to build a second terminal (LNG T2) to boost the country's energy security and grow the LNG industry here.

The EMA chief's comments suggest that LNG T2 will at least match the 15 million tonnes per annum (tpa) storage and regasification capacity which the Singapore LNG terminal will eventually reach, once the Jurong Island site is fully maximised with seven storage tanks.

SLNG, meanwhile, has just been given the government's go-ahead for a third-phase expansion which should easily bring the investment in the S$1.7 billion terminal past the $2 billion mark.

It comprises the building of a fourth tank and related equipment to boost the terminal's capacity to at least nine million tpa by 2017.

Singapore needs to diversify its gas supplies beyond piped gas from neighbouring Indonesia and Malaysia, Mr Chee said, adding that LNG imports currently meets just 20 per cent of gas needs here, although this LNG portion will grow.

"Diversification is also important from a price point of view," he added. With the opening up of the SLNG terminal shortly to more users - beyond just initial LNG aggregator BG Group - there will be greater competition and choices for buyers, with this leading to price discovery, he said.

As BG is close to hitting its franchised import volume of three million tpa, Singapore has also started to look for a buyer for its next LNG import tranche for domestic needs.

On this, the EMA chief said that a two-stage Request for Proposals (RFP) will be launched shortly in the second quarter, with the process taking 15-18 months.

Up to two aggregators could be appointed at the end of it, he indicated.

Mr Chee invited international gas players at the conference to participate in the RFP, saying they could do so as individual corporations, as part of a consortium, or even in joint venture with Singapore parties.

With the recent completion in January of a third tank, which has boosted its current capacity to six million tpa, SLNG now also has spare capacity to open up the terminal for use by others.

BG Singapore's general manager Anthony Barker said that this will lead to physical hub activity here emerging, like diversion of cargoes, reloads and cool-down services.

On the last, SLNG has so far carried this out for one LNG ship and is preparing to do so for two more, with the service involving cooling down the ambient temperature tanks of newly built LNG ships or those which have come out of drydock, to enable the ships to proceed to load their first or next cargoes.

There is now also spare capacity for storage and send-out and storage and reload, and also the possibility for LNG trading here, he added.