Could you bring us up to the date with the latest developments at SLNG, its current capacities, highlighting any important milestones?
The SLNG Terminal currently operates with three LNG storage tanks of 180,000 cubic metres capacity each, a fourth storage tank of 260,000 cubic metres capacity (which is amongst the largest in the world), two jetties that are able to accommodate a wide range of LNG ships, up to the largest Q-Max ships, and can serve a throughput capacity of around 11 million tonnes per annum (Mtpa).
The Terminal is also able to receive and reload small LNG ships of between 2,000 cubic metres and 10,000 cubic metres in capacity, and has an LNG Truck Loading Bay, the first such facility in Singapore, designed to accommodate LNG trucks of up to 50 cubic metres in capacity.
Since April 2020, we have embarked on a new 5-year strategic plan which, among other things, looks at creating new value by growing the LNG eco-system in Singapore and beyond. This includes working with key partners and stakeholders to catalyse the development of the LNG throughput and bunkering business in Singapore, and facilitating greater LNG trading activities through expanding infrastructure, particularly LNG storage facilities. We are also investing significant time and effort into digital and business transformation projects that will make SLNG more efficient in our operations, and more agile in responding to market needs.
To align with this new phase of the company’s growth and development, we have recast our Vision and reset our Values to guide us in the right direction. SLNG’s new Vision is to Catalyse New Possibilities in the Energy Transition. Essentially, this means that as we continue to strive to fulfil and even exceed our energy security mandate, we will at the same time work to facilitate the growth of the LNG eco-system in Singapore and beyond; define new uses, solutions and opportunities for LNG and our Terminal; and explore and support the adoption of newer, greener and more sustainable sources of energy.
Singapore has been striving towards greater resource and energy self-sufficiency. What is SLNG’s significance and contribution in this sense?
More than 95% of electricity here is generated using natural gas. In land-scarce countries like Singapore, natural gas offers the optimum balance between Energy Security, Energy Cost and Environmental Sustainability. It is also one of the “4 Switches” in Singapore’s Energy Future, as defined by the Energy Market Authority (EMA) – the other three being Solar, Regional Power Grids and Emerging Low-Carbon Alternatives.
What do you identify as some of the main challenges for Singapore to become a referential LNG trading hub in Asia?
We understand that an effective LNG hub is one that facilitates open-access physical trade exchanges by providing transparent pricing (and hedging) for buyers and sellers. It is where demand and supply meet, in papers and in physical delivery. One of the main outcomes of an effective LNG hub is price discovery for spot and term contracts, and ancillary services. The greater the volume of LNG transactions, the faster the price discovery and formation are established for the hub. This is an important feature for growing market flexibility, allowing buyers and sellers to develop value-added offerings and platforms to trade LNG competitively. To this end, SLNG is well-positioned to provide competitive and flexible services that support growing segments in the global LNG market, such as bulk-breaking and bunkering. As a multi-user terminal, SLNG has leveraged Singapore’s advantage to promote regional commercial and physical LNG trades, and is the leading provider of LNG ancillary services for the region.
However, being a hub presumes a steady flow of trade and activities into and out of the hub. As such, Singapore cannot be an LNG hub on its own – there needs to be a vibrant ecosystem of LNG facilities and activities from the region around Singapore. That, perhaps, may be the main challenge.
What is your long-term view on LNG adoption?
We are seeing greater demand for LNG in the region, mainly in the power sector. And on the shipping front, with the International Maritime Organisation’s (IMO’s) regulation on sulphur emissions in force and the development of further IMO regulations, we are also seeing more orders for new ships to be built to run on LNG.
This has been reflected in various reports of countries going ahead with plans to develop LNG import terminals, such as the Philippines and Vietnam. Given these dynamics, we believe that terminals, especially in the region, will be expected to be more flexible in supporting the overall LNG eco-system and there will be greater demand for mid and small-scale LNG transhipment and bunkering services in the years to come.