Singapore GasCo has bought enough LNG to last for rest of year

[SINGAPORE] Singapore has bought enough liquefied natural gas (LNG) to last through the end of the year, as it replaces shipments stuck behind the Strait of Hormuz due to the Iran war.

State-owned Singapore GasCo, which was established last year, secured shipments from regions outside the Middle East via the spot market, CEO Alan Heng said on Tuesday (May 19). The company is also eyeing long-term deals with various suppliers, including the US, Australia, and Canada, he said.

The company, who had planned to build Singapore’s long-term gas supply portfolio this year, shifted strategy after the US and Israel launched strikes on Iran in late February, disrupting traffic through Hormuz – a key waterway for a fifth of global LNG supply. Since then, the company has also been managing Singapore’s short-term requirements and buying spot shipments, Heng said.

The Iran war has prompted governments to hunt for spot LNG shipments, switch to alternatives such as coal, and even implement fuel curbs to manage shortages.

Singapore relies on natural gas to generate nearly all of its electricity, and imported more than 40 per cent of its LNG from Qatar last year. In March, Singapore warned of higher electricity prices as the conflict strains supplies.

“We have secured enough LNG to manage the curtailment we are seeing come through” from the Middle East, said Heng.

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The importer is also looking to procure as much as four million tonnes of LNG per year by 2032, with the exact amount depending on factors including availability of piped gas, new power plants and demand, he said. BLOOMBERG