[SINGAPORE] Singapore’s new state gas buyer GasCo will seek offers in the first quarter for liquefied natural gas term supply for delivery from 2028 to meet an expected supply gap in the country, its chief executive said.
The company was set up earlier this year to centralise Singapore’s gas procurement and supply after LNG prices spiked with the Ukraine-Russia war.
Existing contracts will cover Singapore’s demand over the next two years, but the supply gap is set to grow to around 3 million tonnes in 2028-2029, and reach about 6 million tons in 2035, Alan Heng told Reuters during an interview on Thursday (Nov 20).
“We anticipate that by 2028-2029 it would ramp up quite significantly,” he said, with these estimates factoring in imports of piped gas and power from neighbouring countries.
The city-state relies on gas to generate 95 per cent of its electricity.
Buyers will continue managing the existing contracts, with deals for piped gas mostly ending by 2028 and LNG from 2028 to 2032, Heng said.
Price and supply reliability will be key considerations for GasCo in evaluating new offers, as well as contractual flexibility, said Heng.
“It can be by way of turning down cargoes. It can also be by way of asking for more cargoes … But having some ability to divert cargoes is also helpful for us.”
GasCo plans to nearly double its headcount by next year from 25 staff currently, Heng added.
Last month, Heng announced that GasCo was in talks with LNG suppliers for long-term contracts, and expected US supply to be part of its portfolio.
Besides US LNG, which is typically priced off the Henry Hub benchmark, GasCo will also seek Brent-linked term supplies commonly used by Singapore’s power firms, said Heng.
Singapore would also like to renew piped gas import deals with its neighbours, though Heng acknowledged the volumes Singapore receives will eventually decline as Malaysia and Indonesia use their fields to meet growing domestic demand.
“In the event that there is piped gas, it will complement LNG. But if it’s not available, then LNG becomes a predominant supply,” he said.
Singapore is already seeing increasing volumes of imported LNG.
A wave of new LNG supplies, which analysts expect to come online through the end of the decade, will favour buyers, Heng said.
“There’s going to be quite a bit of LNG coming our way so we actually think it’s a good time to contract.” REUTERS
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