Singapore LNG Gets Very Cold, Very Quickly as First Cargo Arrives

LNG import jetty, image (c) Singapore LNG

(Bloomberg) — Singapore LNG Corp., the island state’s importer of liquefied natural gas, received its first cargo and will use the spot shipment from Qatar to start operations next quarter.

“The first commissioning LNG cargo arrived at the Singapore LNG terminal on March 27, 2013,” Simon Ang, a company spokesman, said in an e-mailed statement today. “This LNG cargo will be used to cool down and commission the LNG terminal, to get it ready for full and continuous operations by the second quarter of 2013.”

Singapore, vying to become Asia’s hub for trading LNG, has no long-term supply contract with Qatar, the world’s largest producer of natural gas chilled to liquid form for shipping, according to data compiled by Bloomberg. The Energy Market Authority, Singapore’s regulator, agreed in 2008 to import LNG from BG Group Plc over 10 years.

The Umm Slal, with a capacity of 260,928 cubic meters, sailed from Qatargas’s Ras Laffan LNG terminal, where it loaded the supercooled natural gas and departed March 18, according to ship transmissions captured by IHS Fairplay on Bloomberg. The tanker is a Q-Max LNG vessel, which is the largest in its class.

“We are not at liberty to divulge the value and size of the commissioning cargo due to commercial confidentiality,” Ang said.

BG’s first LNG cargo to Singapore may come from Trinidad & Tobago or Africa, Neil McGregor, the SLNG’s chief executive officer said in a Feb. 19 interview. BG’s Singapore-based spokesman, Damien Bird, declined to discuss the source of the LNG or its arrival date in an e-mailed statement.

Asian Hub

Singapore is the most likely hub for trading natural gas, according to the International Energy Agency. Its new LNG terminal will serve a wide array of tankers and boost import capacity “far beyond” domestic needs, the IEA said in a report Feb. 26.

Three new companies may become importers, aggregators or traders using the Singapore LNG terminal along with BG, McGregor said. Singapore’s energy regulator will start new consultations with LNG suppliers once BG sells the cargoes from its 3 million metric ton-a-year contract, Lee Yi Shyan, the country’s trade minister, said Jan. 24.

Further Growth

The master plan for Singapore’s LNG terminal calls for as many as seven storage tanks and a peak capacity of 20 million tons, McGregor said. The company is currently considering a fourth gas storage tank big enough to fit four A380 jumbo jets to lower storage costs and hold cargoes from a 266,000 cubic- meter Q-Max LNG ship, he said.

A final decision on whether to build the fourth LNG tank is expected by year end, and construction could be completed by 2017, McGregor said.

The fourth unit may cost around S$500 million ($403 million), S. Iswaran, Singapore’s second trade minister, said in October.

The facility will start operating with two 188,000 cubic- meter tanks and a 3.5 million ton-a-year capacity. It will expand its terminal to 6 million metric tons-a-year with the addition of a third 188,000 cubic-meter tank by early 2014, according to the company’s website.

The site of the terminal has land for two liquefied petroleum gas tanks, which may be built if “the business case underpins the investment,” McGregor said.

An LPG facility at the terminal can be used to increase the energy content of LNG cargoes to produce the so-called rich natural gas preferred by North Asian LNG buyers, McGregor said.

– Chou Hui Hong, Copyright 2013 Bloomberg.