Recent Study: Singapore Oil & Gas Report Q2 2014

Petrochemicals and refining remain the lifeblood of Singapore, with strong regional demand growth meaning there is potential for capacity expansion - although investment in countries such as China and Vietnam has led to increasingly fierce competition. Growing gas demand means liquefied natural gas imports are needed to augment pipeline volumes from Indonesia and Malaysia.

The main trends and developments we highlight in the Singaporean oil and gas sector are:

* Singapore's first liquefied natural gas (LNG) import terminal, which began operations on May 7, 2013, will be expanded to ensure it can meet all of the island-state's gas demand, raising the possibility that existing pipeline gas supply contracts with Malaysia and Indonesia may not be renewed. Chee Hong Tat, the chief executive of Singapore's Energy Market Authority (EMA), told an industry conference on March 5 2012 that the government would 'ensure sufficient capacity to import LNG to meet all of [Singapore's] gas demand'.
* The terminal, which was completed under a budget of SGD1.7bn (US$1.39bn), had an initial capacity of 3.5mn tonnes per annum (tpa) - equivalent to 4.8bn cubic metres (bcm) of gas. The government announced in October 2012 that it would expand capacity to 9mn tpa with the addition of a SGD500mn fourth gas storage tank, likely to be complete by 2017.
* The facility's third tank came online near the end of 2013, bringing the facility's current capacity to 6mn tpa. The facility's fourth storage tank remains on target to be completed within the previously stated 2016-2017 timeframe. Singapore LNG Corporation (SLNG) is hopeful that the city-state's soaring capacity will not only satiate the country's own demand, but will also allow Singapore to become a leading LNG trading hub for the region.
* Interest in the new terminal had nearly outstripped supply as of April 2013, at which point Singaporean power supply firms as well as other industries had committed to at least 2.7mn tpa. BG Group owns the franchise rights to supply the first 3.0mn tpa; a level which, given current demand trends, may be breached within the next few quarters.
* State-owned sovereign wealth fund Temasek Holdings in September 2013 announced that its new LNG unit Pavilion Energy will begin to trade LNG in Asia before the end of 2013, seeking to establish partnerships with existing firms in China, South Korea, Japan, and Taiwan. Pavilion was created with initial capital of SGD1bn, but will seek to raise additional capital according to CEO Seah Moon Ming.

Full Report Details at
- http://www.fastmr.com/prod/777808_singapore_oil_gas_report_q2_2014.aspx?afid=301

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