OPENING ADDRESS BY DR KOH POH KOON, SENIOR MINISTER OF STATE, MINISTRY OF TRADE AND INDUSTRY, AT THE PAVILION ENERGY LNG BUNKERING LAUNCH CEREMONY, ON TUESDAY, 2 MAY 2017, 3.15 PM, AT JURONG PORT
Distinguished Guests
Ladies and Gentlemen
Introduction
1. Good afternoon. I am pleased to join you at Pavilion Energy’s Liquefied Natural Gas (LNG) bunkering launch ceremony, the first capability demonstration in Singapore and South East Asia.
Development of Singapore’s LNG Landscape
2. As a small country with resource constraints, it is crucial for Singapore to ensure that our energy supply is both secure and competitive. To this end, we developed our LNG terminal, which began operations in 2013. Its present throughput capacity of 6 million tonnes per annum (Mtpa) will be raised to 11 Mtpa when construction of additional regasification facilities is completed this year. In addition, a fourth tank will be completed by the first quarter of 2018, increasing our storage capacity to a total of 800,000m3. We also recently awarded an LNG import licence each to Shell and Pavilion Gas following a competitive process, to supply Singapore’s next tranche of gas demand.
3. Beyond meeting our domestic energy needs, Singapore has been taking steps to position ourselves as a regional gas hub. Changes in the global gas market have created exciting opportunities in LNG trading and bunkering, and Singapore offers several advantages for companies seeking to grow their presence in these areas.
4. For example, Singapore is a neutral marketplace and in close proximity to traditional and emerging buyer demand in Asia. Our status as a leading trading and financial hub will support companies in the LNG industry. Thanks to the efforts of International Enterprise (IE) Singapore in building the LNG trading community, there are now more than 40 companies with an LNG trading or business development presence in Singapore. On price discovery, the Singapore Exchange (SGX) has launched several Singapore LNG Index Group (Sling) indices, covering the Singapore, North Asia (NA) and the Dubai, Kuwait and India (DKI) regions. This will facilitate the growth of physical spot trading of LNG. In addition, anchoring a pricing benchmark in Singapore will increase trading liquidity, and is also an important piece for Singapore to advance as an LNG trading hub.
5. The expansion of our LNG infrastructure and capabilities will further increase opportunities for LNG trading and bunkering, which are important elements for a regional gas hub. For instance, the Singapore LNG Corporation (SLNG) recently launched its first LNG trucking loading facility at its terminal. This will facilitate transportation of small LNG volumes to onshore consumers as well as to vessels requiring LNG as bunker fuel.
Efforts in Promoting LNG Bunkering
6. LNG bunkering is also poised to grow in line with international developments in the maritime industry, in particular the decision by the International Maritime Organisation (IMO) last October to limit global sulphur emissions to 0.5% from 2020.
7. As the world’s largest bunkering port, Singapore remains committed to ensuring that the maritime industry has access to cleaner marine fuels. We plan to be LNG bunker-ready as early as 2020, and today is an important milestone in this journey. For example, the Maritime Port Authority of Singapore (MPA) has a programme to co-fund up to S$2 million for LNG-fuelled harbour craft. I am excited that five such harbour craft will be coming on stream from 2018 onwards. The five harbour craft include tug boats and bunker tankers from Keppel SMIT, Maju Maritime, Harley Marine and Sinanju Tankers. I would like to commend these companies for taking the first step to using LNG in support of a cleaner environment for port operations.
8. Through the Port Focus Group which Singapore is a member of, we will also keep abreast of developments in LNG bunkering, learn best practices from other members, and participate in building a network of LNG bunker-ready ports for vessels plying the Far-East Europe and Transpacific routes.
9. Following the award of LNG bunkering licences to Pavilion and FueLNG last year, the MPA will embark on a three-year LNG bunkering pilot program this year. This will allow us to test operational protocols, gain operational experience and beef up Singapore’s capabilities to ensure that LNG bunkering is carried out safely, efficiently, and reliably.
10. Today’s demonstration by Pavilion Gas is testament to Singapore’s progress in conducting LNG bunkering operations.
Conclusion
11. LNG bunkering is an important aspect of a vibrant LNG trading hub, and the Singapore government will continue to work closely with the industry to make us LNG bunker-ready. We welcome interested parties, both ocean going vessels and harbour craft, who are looking to use LNG, to contact the two LNG bunkering licensees.
12. I wish Pavilion every success for its bunkering venture and look forward to Singapore continuing to be the port of choice for bunkering activities. Thank you.