ConocoPhillips blamed for blackout in Singapore

ConocoPhillips blamed for blackout in Singapore

Beth Jinks, Bloomberg, Singapore

ConocoPhillips, the largest U.S. oil refiner, was blamed for a
power failure that blacked out almost a third of Singapore in
June, 2004, a committee appointed by the island-state's
government said today.

Equipment failures at the company's gas-receiving facility in
Singapore triggered the power failure, the Energy System Review
Committee said at a media briefing in Singapore.

The committee was formed to scrutinize the price and
reliability of Singapore's power supply after the blackout on
June 29, 2004, which cut power to more than 300,000 homes.

Singapore's government in July said ConocoPhillips would be
placed under license control by the end of 2004, a ruling that
would bring the company under the control of the Energy Market
Authority, which can fine licensees including power generators
and the country's power grid for breaking industry regulations.

Any fines that the government imposes because of last year's
blackout must be "sizable enough to get a particular party to do
something it wouldn't otherwise do," said committee member Peter
De Wit, who is also Asia president for Shell Gas & Power.

ConocoPhillips's spokeswoman in Jakarta, Santi Manuhutu,
wasn't available for comment. Jim Taylor, Jakarta-based vice-
president of ConocoPhillips, in June last year said the power
failure was caused by a technical fault at the company's plant in
Singapore that receives natural gas from Indonesia.

Separately, the committee said a study on the feasibility of
building a liquefied natural gas terminal in Singapore will be
finished within a year. Alternative gas supplies are being
investigated as the country opens the market to more competition.

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.

Singapore is considering importing liquefied natural gas to
lower energy costs, Lim Hng Kiang, minister for trade and
industry, told parliament on March 8.

"The government is looking into the viability of setting up an
LNG terminal in Singapore," Lim said. "This will bring in more
potential suppliers and this will give us greater leverage to
bring in more competitive prices for our gas supplies."

Earlier this month 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
LNG, 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.