LNG experience a legacy to share and treasure

PHOTO: LNG experience a legacy to share and treasure

He said no, not once, but three times when he was asked to lead Singapore's charge into building an ambitious Liquefied Natural Gas (LNG) terminal on Jurong Island.

That was in 2009, when Mr Neil McGregor was the managing director of the PowerSeraya Group and chairman of PetroSeraya, the oil trading arm of PowerSeraya.

The 58-year-old New Zealander had done start-ups before, and was not keen on another.

"Start-ups take 110 per cent and more. They make a young man old fairly quickly because the timetable and decision-making are compressed. It's hard on people," said Mr McGregor. But the Singapore permanent resident felt he wanted to leave a "legacy" in his second home. That, and the fact that he was posed a very convincing argument.

"I guess it was the importance this held for Singapore, the charisma of former Energy Market Authority (EMA) chief executive officer Lawrence Wong, and the awareness of the agencies that were willing to back me up. The project had a lot of support," he said of his decision to become chief executive officer of the Singapore LNG Corporation (SLNG).

In May this year, the $1.7 billion, 40ha terminal on the southernmost tip of Jurong Island successfully launched commercial operations, starting a new chapter in Singapore's energy history.

It is one that allows the nation to import natural gas from around the world instead of relying on piped natural gas from Malaysia and Indonesia.

The LNG terminal's initial capacity of 3.5 million tonnes a year will increase to six million tonnes by the year's end after a third storage tank and additional facilities start up. There are already plans for a fourth tank.

Plans to develop the LNG terminal on a commercial basis were first announced in 2006. In April 2008, BG Group (BG) was allowed to import and sell up to three million tonnes per annum of LNG in Singapore.

But the initial business model proved untenable.

"The model didn't contemplate changes in the LNG business, including the impact of shale and commoditisation. All it contemplated was domestic supply with a small capability for export," explained the civil engineer, who also holds a degree in finance.

In June 2009, the Government announced its decision to take over the development and ownership of the terminal, and formed SLNG to develop, build, own and operate the terminal. Mr McGregor and his five-man team were tasked with modifying the business plan from something "vanilla" into one more suited to a "growing piece of infrastructure".

"It meant picturing the future 20 years out from a business perspective, and then taking my 40-odd years of experience and working backwards," he explained.

His plans also made for a landmark moment for Singapore: a 100m tract of reclaimed land had to be turned back into seafront to allow large ships enough clearance to access the berth.

"It's probably the first time Singapore has given land back," he quipped.

But there were other challenges. "We needed people with key (LNG-related) experience but that had to come from the outside. It was not easy and didn't come cheap," he revealed.

Many others had to be retrained from parallel industries, including the petrochemical and power generation industries.

"We leveraged firms that were downsizing through the downturn and took our new hires to South Korea to be retrained. They worked on active LNG facilities there before we brought them back to operate the terminal."

Today, SLNG's team numbers about 130, of which 80 per cent are Singaporeans. The international team comes from countries that include Britain, India, Malaysia and New Zealand.

Since then, SLNG together with EMA have been jointly awarded the 2013 CWC LNG Innovation Asia Pacific Award for excellence in commercial or technical innovation, an industry award covering the region.

SLNG also signed its first vessel cool-down services agreement and performed its first vessel cool-down within five months of starting commercial operations, earlier than expected. A newly-built or newly-repaired LNG ship's tanks must be "cooled down" before they can load a new cargo of LNG.

Having the plant up and running smoothly in just four years is an achievement Mr McGregor is proud of.

"But that's also the benefit of having the Government behind you. Things move," he conceded.

People do, too, and at the end of this year, Mr McGregor will hand the baton to Mr John Ng, former CEO of YTL PowerSeraya Group, which generates and retails energy as a wholly-owned subsidiary of YTL Power International. Mr McGregor will remain on the SLNG board as a non-executive director.

He calls his LNG adventure "one of the most memorable journeys of my life".

"I definitely feel a sense of loss but also a sense of achievement having built a start-up into a corporation that will impact the Singapore economy. That's really something," he said.

Get a copy of The Straits Times or go to straitstimes.com for more stories.