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.