1. A very good morning, colleagues and global energy leaders from governments and also the industry. I spoke to many of the speakers, who flew in to participate in this event, many of them are from the US, welcome to the 16th LNG Supplies for Asian Markets Conference. I am very happy that some of you have come from afar to join us in person here in Singapore today. I am also glad that our LNG community can reconnect through this hybrid event for those who are meeting us virtually.
2. Like what Mr Shahriar Fesharaki and Dr. Jeff Brown had mentioned the theme for this year’s conference, “Asian LNG Markets in a Carbon Constrained World”, aptly addresses the challenges we all face – in what is unfolding in the last few weeks. We see energy markets have been on edge and countries are facing a global energy crunch. Along with increased gas consumption and shortfalls in supply, the ongoing conflict in Europe has far-reaching ramifications on Asian markets. With growing global climate ambitions, countries and investors are pivoting from traditional fuels to cleaner sources of energy. LNG has thus become a key alternative to traditional energy sources and is important for our energy transition.
3. My speech today will focus on three areas:
a. Firstly, LNG’s vital role in the global energy transition and the need for continued investments in LNG capabilities and infrastructure;
b. Secondly, tapping on growth areas such as new energy solutions; and
c. Thirdly, energy partnerships to support Asia’s low-carbon energy transition plans.
LNG’s Vital Role in Global Energy Transition and the Need for Continued Investments in LNG Capabilities and Infrastructure
4. The tight gas market has resulted in significant increase in volatility for the energy markets, especially in the last two weeks. Supply risks have risen due to persistently high global demand and the conflict in Ukraine. Rising power prices have also impacted operations of electricity-intensive industries, with several companies temporarily cutting down production as costs continue to rise. At the same time, countries are looking to move away from coal to cleaner energy sources.
5. Given the intermittency of renewables, power systems need to be supported by low-carbon alternative generation capacity. In this regard, natural gas is the cleanest-burning fossil fuel which can complement the intermittency of renewables and ensure electricity supply reliability, security and affordability. According to the International Energy Agency (IEA), Asia is the largest source of gas demand growth. Between 2020 and 2024, close to 50% of the increase in global gas demand is expected to come from the Asia Pacific region, driven mainly by consumption from industrial processes and feedstock for chemicals.
6. LNG will therefore undoubtedly continue to play a pivotal role in the energy transition towards cleaner sources of energy; it will remain a key part of most energy systems in the present and foreseeable future, before other low-carbon alternatives such as hydrogen become commercially-viable.
Need for Continued Investments in LNG Capabilities and Infrastructure
7. As we work towards decarbonising and diversifying the energy sector, we will need to expand our LNG capabilities and infrastructure to support this ambition. According to the IEA, global LNG trade expanded by 6% last year. This was led by import growth from Asia due to strong economic recovery and cold weather conditions. In 2022, Asia’s gas demand is projected to increase by 5%. Hence, it is essential to ensure supply stability so that we will be less susceptible to price risks.
8. To this end, Singapore is committed to work with our partner countries and industry players to grow LNG presence domestically and globally as an ecosystem.
9. On the capabilities front, Singapore is seeing continual growth in LNG-related solutions and service providers. LNG buyers, sellers, and traders are continuing to set-up LNG desks in Singapore to capitalize on the growing demand for gas in Asia to support the energy transition plans and ambitions. The number of LNG firms with an LNG desk or business development presence in Singapore has increased by more than 30% in the last 4 years, from 45 firms in 2018 to approximately 60 today. The volume of trades by these firms has grown steadily, in tandem with their capabilities and activities - from fundamental analysis structuring of contracts and origination; to operations, price and portfolio optimisation and risk management. We expect these activities to keep growing as we continue to work closely with industry partners and firms to expand their LNG presence domestically and globally.
10. On the infrastructural front, the first LNG terminal in Singapore, Singapore LNG Corporation, or SLNG, has since it started in 2013, has expanded its portfolio to cater to needs of the industry such as storage and reload, breakbulk, bunkering, and vessel cool-down services. SLNG is also collaborating with industry partners on emerging areas such as Natural Gas Liquids extraction and carbon dioxide liquefaction and storage.
11. In addition, there have been efforts to further establish Singapore as a key LNG hub by empowering private players to build, own and operate offshore LNG terminals. At the same time, we are also appointing more term LNG importers through the launch of Expression of Interest and Request-for-Proposal. Not only will these enhance our value proposition and maintain a balanced portfolio of energy sources, they will also ensure competitive LNG prices in the longer term.
12. Singapore remains committed to enhancing our LNG value chain components which comprise the development of a physical delivery hub, a transparent and reliable pricing market, and a financial intermediation hub. Today, Singapore has over 50 companies with an LNG trading or business development presence, which complement the various suppliers and independent trading companies already in the LNG ecosystem. We will continue to pursue our pro-enterprise policies and work alongside industry partners to expand LNG capabilities and infrastructure.
Tapping on Growth Areas such as New Energy Solutions
13. Although we have seen much success in scaling up the adoption of LNG and upgrading our value chain, we cannot rest on our laurels. We need to continue exploring low-carbon alternatives to enable the energy transition and safeguard our collective energy security. If anything the conflict in Europe highlights the importance of energy security and reliability.
Early Investments in Alternative Energy Technologies
14. While LNG remains pivotal for Singapore’s energy transition, we should cast our eyes further to the future and make early investments in other alternative energy technologies. One example is low-carbon hydrogen, which has the potential to be produced and transported globally through well-developed supply chains just like oil and LNG. This allows countries which lack renewable energy to access cleaner energy sources from across the world and helps support global decarbonisation.
15. Starting from 2019, more than 15 countries have defined their hydrogen strategies and roadmaps, sending positive long-term signals to the market. The adoption of hydrogen will soon become more prevalent as countries conduct pilots and witness breakthroughs in real applications. With more projects scaling up hydrogen demand, the eventual development of a global hydrogen market would facilitate trading activities where countries with surplus supply could export to those which are alternative energy-disadvantaged.
16. To accelerate decarbonisation and attain our energy targets, Singapore has taken steps to encourage investments in this domain. In October 2021, the Government awarded $55 million under the first Low-Carbon Energy Research Funding Initiative grant call to support 12 research projects. Out of these, 4 projects will focus on the aspects of cost reduction, transport efficiencies, and development of sensors to detect leaks for hydrogen, while the remaining 8 will study carbon capture, utilisation and storage (CCUS), and specifically on how captured carbon dioxide can be used as inputs for various industrial processes.
17. These significant investments manifest Singapore’s commitment to developing the relevant capabilities to achieve the 2050 emission targets. The Government will continue to work closely with local, regional, and international stakeholders to pilot new technologies and catalyse the development of alternative energy solutions.
18. Just very recently, Singapore has identified nuclear energy as a potential power source for the country by 2050. We will continue to prepare by reviewing the required capabilities, regulations and resources needed to adopt nuclear technology.
Energy Partnerships to Support Asia’s Low-Carbon Energy Transition Plans
19. The energy transition journey is certainly a challenging one, not just for Singapore but all of us in this region. Therefore, regional and international partnerships are key in enabling collaborations, shaping regulatory policies, and ensuring energy security.
20. To accelerate this energy transition, we need to work closely together to coordinate our efforts in setting standards, enabling supply chains and fostering new technologies. The development of international standards and scaling up of new technologies must advance in tandem with global demand for low-carbon energy. Greater knowledge-sharing through collaborations would also enable countries to learn best practices, while spurring innovations. The growth in the demand and use of new technologies across countries can lead to economies of scale which could in turn, accelerate cost reduction.
21. Looking ahead, a key area of collaboration is regional electricity trading. Regional power grids enable the flow of finance and investments into countries with renewable energy potential. This accelerates the development of renewable energy which can serve the source countries and surrounding region. Projects like these not only facilitate regional decarbonisation, enhance energy resilience and grid stability for all parties involved, they also support economic growth and job creation in the source countries. This is why Singapore is partnering our neighbors to advance the development of regional power grids.
22. Hydrogen is another potential area of collaboration. Hydrogen is helpful as a fuel for the storage and transportation of energy, as well as a decarbonisation tool for the industry. Singapore is working with like-minded international partners such as Australia, New Zealand, and Chile to develop low-carbon hydrogen supply chains. We are also embarking on joint RD&D (research, development, and deployment) and test-bedding of areas such as shipping low-carbon hydrogen to reduce the costs of storing and transporting hydrogen.
23. Singapore participates actively in various regional and international platforms to discuss issues relating to energy transition and security. Some of these include the ASEAN, the Asia-Pacific Economic Cooperation (APEC), as well as G20.
24. International cooperation plays a critical role in the development of clean energy technologies. Making net zero emissions a reality hinges on unwavering commitment from governments – working together across borders, together with businesses, investors and citizens. To transit to a low-carbon future, we need greater global cooperation in energy innovation and technology development. I hope events like today’s will move us closer toward this aim as we journey this energy transition together.
25. Singapore will continue to enhance our value proposition as a key LNG hub. Even as the LNG market expects to face uncertainties in the light of tight gas supply and rising demand, we will improve our ability to capture greater economic value and achieve our green goals. I am confident that Singapore has much to offer the LNG buyers, sellers and traders, who are keen to be part of this ecosystem in Asia. We are committed to forging partnerships with Governments and industry players across the value chain to seize opportunities and achieve our collective sustainability ambitions. On this note, I would like to thank you and wish you a very enriching, productive and constructive sessions today and tomorrow.
26. Thank you.