2 Dec First LNG shipment due from Qatar next year

SINGAPORE - SINGAPORE LNG Corporation (SLNG) has procured the country's first liquefied natural gas (LNG) shipment from Qatar, which will be used to cool down and commission the terminal developer's new US$1.7 billion (S$2.1 billion) terminal on Jurong Island.

The shipment from QatarGas, the world's largest LNG producer, is expected to arrive in the first quarter of next year.

The shipment will be progressively transferred to SLNG's storage tanks during the initial cool-down, a process that will get the terminal ready for full and continuous operations by the second quarter of 2013, SLNG said.

Announcing this in a joint statement with QatarGas yesterday, SLNG said it had held talks with more than 10 potential LNG suppliers worldwide, but ultimately picked QatarGas because it offered the most competitive terms overall.

SLNG chief executive Neil McGregor said the purchase of this shipment from QatarGas was significant for its being Singapore's first LNG shipment and for affirming Singapore's capability to import LNG.

"This opens up future supply options that were not previously available to Singapore, and is a great boost to Singapore's efforts to ensure energy security," he said.

Up until now, the country has depended on natural gas piped in from Indonesia and Malaysia, countries where domestic gas needs are on the rise even as their gas production declines.

SLNG said that when its terminal starts up, its focus will at first be on servicing the needs of LNG aggregator BG Group and its customers by receiving, storing and sending out LNG for the domestic market.

BG Group will be importing a franchised volume of three million tonnes per annum of LNG with Australia, which is set to be a key supply source; the group is building an LNG plant in Queensland.

But given the expected growth in demand for gas here, Singapore is already looking at how best to source future LNG supplies beyond the initial BG aggregatorship.

Mr McGregor said that once the new LNG terminal is commissioned and further developments are progressively added, Singapore will a step closer to staking its claim on being an LNG hub in the region, "adding depth to the nation's already established energy sector".

Following strong user interest from global LNG players such as BP, Shell and Gazprom, SLNG has started work on building a fourth tank costing some US$500 million.

This will increase its capacity, even as it eyes future expansions on its site, which can accommodate up to seven tanks.