Sector Information

OilGasDownstream

The past few years have been a challenging period for companies in the natural gas sector, including supporting industries such as the offshore and marine sector. Expected growth for gas is slow over the next few years due to the muted economic recovery in many advanced economies such as the United States and Europe. In addition, a prolonged downturn in oil and commodity prices has had a knock-on impact on gas prices and demand for O&M services.

However, the natural gas sector still presents valuable opportunities in the longer term. As the fastest growing fuel, natural gas is expected to make up almost 30% of the global energy mix by 2035. From 2015 to 2030, demand for natural gas is expected to grow up to two and a half times faster than demand for crude oil. To meet growing demand, expenditure on LNG facilities and carriers are expected to rise to over US$240 billion from 2016-2020, a 34% increase over the previous five years. At the same time, there are new developments outside the traditional LNG space that present new opportunities, such as the growth of small-scale LNG.

Over the past 40 years, Singapore has evolved from a regional ship repair centre to a world-leading offshore and marine hub. With Singapore’s proximity to traditional and emerging buyer demand in Asia, status as a neutral marketplace and reputation as a leading trading and financial hub, we are well-placed to ride the growth of natural gas and become Asia’s LNG hub.

 

Why Partner Singapore?

1

Comprehensive Physical Infrastructure

The Singapore government has invested heavily in infrastructure to support the country’s energy needs. As an open access terminal, the Singapore LNG terminal (SLNG) can be used to support physical LNG trading in the region. Its throughput capacity will increase from 6 to 11 million tonnes per annum by 2017, while the fourth tank will be completed by 2018. This will increase the terminal’s ability to support storage, reloading and break-bulking of LNG for our region.

2

Developments in LNG bunkering

The Maritime Port Authority (MPA) of Singapore is also planning for LNG bunkering in the Port of Singapore. The MPA is harmonising LNG bunkering standards and procedures at both the national and international levels, and will fund up to S$12 million for the building of six LNG-fuelled vessels to proliferate LNG usage.

3

SLInG as a price discovery tool

The SGX LNG Index Group or SLInG – an initiative by the Singapore Exchange (SGX) and the Energy Market Company – serves as a neutral Asian gas price. This Index is suitable for most Asian seaborne LNG trade, regardless of whether it is offloaded or stored in Singapore or passes through the Straits of Malacca and Singapore. Earlier this January in 2016, SGX launched swaps and futures derivatives as risk management tools based on the Sling index.

 

Sector Image