Singapore may import LNG to cut energy prices, minister says
Singapore is considering the import of liquefied natural gas (LNG) as a way of lowering energy costs, according to Lim Hng Kiang, minister for trade and industry.
"The government is looking into the viability of setting up an LNG terminal in Singapore," Lim said in parliament on Tuesday. "This will bring in more potential suppliers and this will give us greater leverage to bring in more competitive prices for our gas supplies."
Natural gas, used to generate 70 percent of Singapore's power, is supplied through pipelines from fields in neighboring Malaysia and Indonesia. Singapore's gas prices are as much as 40 percent higher than those in South Korea, Lim said.
Last week, Vivian Balakrishnan, Singapore's senior minister of state for trade and industry, said an LNG terminal may be built in Singapore by 2012. The government hired a unit of Tokyo Gas Co., Japan's biggest distributor of the fuel, in late January to gauge the feasibility of the island state importing liquefied natural gas, the Energy Market Authority said at the time.
"We have to recognize we have only two suppliers, Malaysia and Indonesia, and these supplies come in the form of pipelines, which requires quite a heavy investment upfront," Lim said.
LNG is natural gas that is cooled to liquid form so it can be transported by ship. Import terminals return the LNG to gas form so that it can be sent through pipelines to factories, power stations and households.