SembCorp interested in LNG terminal project<\/p>\n
Dow Jones, Singapore<\/p>\n
Singapore's SembCorp Utilities is interested in the ownership
\nand operation of the country's first liquefied natural gas
\nreceiving terminal, which the government is considering building,
\nthe company's chief executive office has said.<\/p>\n
The proposed S$500-S$600 million (US$289-$347 million) LNG
\nterminal terminal would secure a third source of supply and
\ncreate price competition with piped gas Singapore imports from
\nIndonesia and Malaysia, CEO Tang Kin Fei told Dow Jones Newswires
\nrecently.<\/p>\n
Additionally, Singapore has the finance available and the
\ninfrastructure in place to build the terminal, he said.<\/p>\n
The government plans to issue a tender for a feasibility study
\nfor the project within the next two months, signaling strong
\ninterest in the project.<\/p>\n
SCU, which is a wholly owned utilities arm of diversified
\nengineering group SembCorp Industries, supplies power, steam and
\ngas, and is involved in integrated utilities and offshore
\nengineering.<\/p>\n
SCU will be interested in importing LNG for its customers even
\nif it doesn't own or operate the terminal, Tang said.<\/p>\n
\"It doesn't matter who owns the terminal, as long as it has
\nopen access for LNG importers,\" he said.<\/p>\n
SCU's sister company SembCorp Engineering and Construction
\ncould build the LNG terminal, Tang said.<\/p>\n
\"We're interested in owning the LNG terminal, but it is not a
\nmust for us....We're more interested in selling the gas
\nmolecules,\" he said.<\/p>\n
On the demand side, Tang said that SembGas's customers would
\nwant to buy more gas if the price is competitive.<\/p>\n
SembGas sells piped natural gas to power generation and
\npetrochemical companies including Tuas Power, Power Seraya,
\nSembCorp Cogen, ExxonMobil, Ellba Eastern and some 50 customers
\nin the Jurong and Tuas industrial areas, western Singapore.<\/p>\n
Demand for more gas seems clear. The three main power
\ngenerators in Singapore are all gearing up to use more gas at
\ntheir dual-fuel combined-cycle power units.<\/p>\n
\"The LNG project is definitely viable...It will create price
\ncompetition for piped natural gas and provide another source of
\ngas supply for Singapore,\" Tang said.<\/p>\n
Natural gas suppliers are now only interested in pricing the
\ngas just below the power plant's production cost, he said.<\/p>\n
\"We could use LNG as bargaining tool against piped gas...We
\ndon't have much of a choice at the moment,\" Tang said.<\/p>\n
Currently, piped gas from Indonesia costs about 115 percent of
\nequivalent amounts of high sulfur fuel oil, which translates to
\nabout $4.80-$5.00 per billion British thermal units, he said.<\/p>\n
Tang pointed out that China's LNG importers are securing LNG
\nterm contract price about $3.00-$3.50 per BBTU.<\/p>\n
\"We pay about US$400-500 million each year for our Indonesian
\ngas supply,\" he said, adding that the gas suppliers to Singapore
\nnow have no incentives to reduce the price of piped gas.<\/p>\n
SembGas, a unit in which SCU owns 70 percent share, buys 325
\nMMcf\/d of gas from Indonesian West Natuna field.<\/p>\n
The LNG terminal would offer more supply flexibility and cost
\nsaving to SembGas, Tang said.<\/p>\n
SembGas could buy the 90 percent minimum of its contracted
\nWest Natuna gas supply, and fulfill its remaining requirement via
\nLNG imports, he said.<\/p>\n
Apart from the West Natuna gas supply, Singapore also receives
\n150 MMcf\/d of gas from Malaysia and, by 2009, up to 350 MMcf\/d
\nfrom Indonesian Grissik field.<\/p>\n
A Singapore LNG terminal could be smaller size than the normal
\nterminal capacity of 3 million tons\/year, Tang said.<\/p>\n
A terminal of about 1.5 to 2 million tons\/year capacity would
\nbe feasible for Singapore's needs, he said.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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