A Temasek Holdings unit is up against Exxon Mobil Corp and Royal Dutch Shell plc in a contest to fill storage that will hold three times as much liquefied natural gas (LNG) as Singapore will consume this year.

The city‐state's Energy Market Authority is seeking feedback for stocking an LNG terminal with capacity of as much as nine million tonnes. The threefold expansion will allow Singapore to offer last‐minute deliveries, or spot cargoes, to buyers in Asia seeking an alternative to long‐term contracts linked to oil.

Singapore, Asia's oil‐trading centre, is challenging Shanghai and Bangkok to play matchmaker for buyers and sellers of LNG, supercooled gas shipped by tankers rather than pipelines. Shell, Exxon and Pavilion Energy, set up in April by Singapore's state‐owned investment company, Temasek, are among the contenders as
the city selects additional suppliers for the LNG terminal now stocked exclusively by Berkshire, England‐based BG Group plc. Singapore's new LNG storage centre is designed to limit price volatility in Asia, which bought 71 per cent of the world's traded volume of about 236 million tonnes in 2012, according to The
International Group of Liquefied Natural Gas Importers.

Singapore imported its first LNG cargo in March to inaugurate its three million tonne‐a‐year receiving facility on Jurong Island. Expansion of the terminal to six million tonnes a year is set to be finalised in early 2014, when the facility's third tank is completed, prompting the EMA to begin a second consultation on June 3 about future supplies of LNG.

The proposal provides the EMA with the flexibility to award more import licences as Singapore's gas market grows while facilitating competition and allowing the regulator to adapt to the prevailing market conditions, Mr Chong said. BG won the contract in 2008 to supply three million tonnes of LNG annually over the 10 years starting in 2013. It sold 2.7 million tonnes as of August, the company said.

Source: AmFraser