Good morning distinguished Guests,
Ladies and Gentlemen
1. A very good morning and for those of you who have come from afar to sunny Singapore, a very warm welcome. This is the 14th edition of the LNG Supplies for Asian Markets (LNGA) conference and I think as time evolves and the market changes, it is always good to come together as industry to take stock of what’s going on with the rest of the world.
Global LNG Market Developments
2. The conference theme for this year is “From Regional to Global: Convergence of LNG Markets and Implications for Asia”. As you heard from some of speakers earlier, it is an appropriate one, as we continue to see robust growth in the global LNG market led by increased demand from Asia. In 2018, LNG trades globally increased by 10%, and we expect it to grow by 8% this year. Asia contributed to much of this growth, with China, South Korea and India experiencing double-digit percentage growth in LNG imports in 2018.
3. LNG demand is also expected to remain strong in Asia over the near- to medium-term, driven mainly by China, Southeast Asia, South Korea and Taiwan. And I am sure many of you are aware of some of these trends.
4. This demand arises from higher power generation needs, infrastructure expansion and falling indigenous gas production. Growing environmental concerns around the world could further boost LNG demand as more countries make the switch towards cleaner sources of fuel such as natural gas. As a whole, Asia’s LNG imports is expected to grow by 50% over the next ten years. There is a huge upside there potentially, provided geopolitics do not get in the way, and we all continue to prosper together. That’s on the demand side.
5. On the supply side, the outlook for LNG supply is bullish. Production has grown strongly over the last two years, as new facilities have come online in Australia, Russia and the US. This year, an additional 43 million tonnes per annum (Mtpa) of production capacity is expected to be commissioned, with the majority coming from US projects such as Corpus Christi, Freeport and Cameron. 2018 also saw three projects taking Final Investment Decision , with the largest being Shell’s 14 Mtpa LNG Canada project in West Canada.
6. Backed by strong production growth, the market is expected to have adequate LNG supply to meet growing demand right up to 2020. What is Singapore’s energy strategies and what are we doing in light of this global development?
Singapore’s LNG Strategies
7. Today, close to half of Asia’s gas demand is supplied by LNG and we think that this percentage is expected to continue to increase. In view of growing regional demand, Singapore has been working on several initiatives to support a more dynamic Asian market as a regional gas hub.
SLNG Terminal Development
8. For example, Singapore LNG Corporation, or SLNG, has recently expanded its capacity to support LNG trading activities and ancillary services. These include storage and reload, and bulk-breaking services to serve regional LNG demand.
9. In December last year, SLNG proactively engaged the market to assess interest for a fifth storage tank by issuing an Expression of Interest (EOI). This EOI has since closed and SLNG is reviewing the proposals it has received. I was told there is quite a huge number of proposals submitted for consideration, so we look forward to the outcomes of that and hopefully, we will continue to grow the market here.
10. In order to better cater to LNG bunkering and break-bulk, SLNG has also modified its secondary jetty in February this year to start receiving smaller vessels with capacities from 2,000 to 10,000 cubic metres. Depending on demand, a third jetty can be developed to better support domestic LNG bunkering, as well as small-scale LNG opportunities in this region.
Advancing our ambitions to be an LNG hub
11. Beyond infrastructure at the terminal itself, Singapore has also developed an extensive ecosystem of LNG-related services and infrastructure solution providers based here in Singapore. We currently have a pool of more than 45 international firms involved in LNG trading and business development. Singapore will continue to enhance our pro-enterprise policies and work closely with the LNG industry to expand their presence here.
12. In January 2018, Singapore introduced our spot LNG import policy to allow gas buyers to swiftly and effectively respond to changing market demand, and encourage more gas-on-gas competition in the domestic market. Under this policy, Singapore saw our first LNG spot cargo last year and we welcome more of such imports.
LNG Bunkering and Small Scale LNG Solutions
13. Another area where Singapore has focused its efforts on, is the growth of LNG demand from the marine sector. This demand is driven by the International Maritime Organisation’s regulation to reduce the global sulphur limit for marine fuel from the current 3.5% to 0.5% from January 2020. And that’s just a few more months away. To comply with this requirement, LNG bunkering is projected to reach between 20 and 30 million tonnes per annum by 2030. The Maritime Port Authority of Singapore has provided grants totalling 24 million Singapore dollars in the last two years, to co-fund the building of LNG-fuelled vessels and LNG bunker vessels. Today, two LNG-fuelled tug boats built with the support of these grants are already in operation, with another two LNG bunker vessels expected to be delivered from 2020.
14. In addition, Singapore firms such as SSB Cryogenic Services and Global Petro Storage Singapore, have signed a $50 million agreement to develop small-scale LNG supply chain solutions in Southeast Asia. Hopefully this will help to capitalise some of the growth of demand in our region.
15. The conference theme for this year serves as a timely reminder that the global LNG market has become much more interconnected, with developments in one region having an impact in another. Singapore has much to offer suppliers and buyers alike who are looking to tap into the growing Asian gas market, especially here in growing South-East Asia. I would like to encourage all of you to leverage Singapore’s unique offerings to grow your gas-related businesses. Let me conclude by saying that the LNGA conference has been an important platform for companies and policymakers to discuss the issues. It offers the opportunity for us to really take an in-depth look and discuss how we should navigate some of the challenges, some of the changes, and seize some of the opportunities that we see over the horizon. Let me take the chance to wish everyone a fruitful and productive conference. Thank you.