Singapore, South Korea Eye Joint LNG Procurement Program

Singapore’s Energy Market Authority (EMA) and South Korean state-backed Korea Gas Corp. (KOGAS) have signed a deal to explore potential joint purchases of liquefied natural gas (LNG).

Under the memorandum of understanding (MOU), the Southeast Asian city-state hopes to learn from major LNG importer South Korea about the procurement and management of LNG supply. Singapore plans to meet all its gas needs by LNG.

“The MoU is part of EMA’s efforts to further strengthen our LNG supply chains and energy security”, the agency said in a statement.

“While we continue to pursue alternative energy sources, natural gas will continue to account for a significant share of Singapore’s energy mix during the energy transition”, added the statement on the EMA website.

Gas dominates Singapore’s fuel mix. It accounted for 92 percent in 2022 and 94.3 percent in the first half of 2023, the latest government data shows. The country of about six million people imported around 10,500 metric tons of gas in oil equivalent in 2022, with 6,400 via pipeline, according to the latest annual statistics from the EMA.

Singapore plans to build a second LNG terminal after the onshore facility on Jurong Island, which started operation 2013 and has an annual average capacity of approximately nine million metric tons per annum (MMtpa). Prime Minister and Finance Minister Lawrence Wong, then deputy premier, announced the initiative October 2023.

“The Second Terminal will better enable Singapore’s demand for natural gas to be met entirely by liquefied natural gas, should that become necessary; and will enhance SLNG’s capacity to deliver more LNG-related services, further entrenching Singapore as a key trading and bunkering hub for LNG”, Singapore LNG Corporation Pte. Ltd. said in a statement at the time.

SLNG said it was considering a floating storage and regasification unit for its second terminal. The new project, targeted to have a capacity of five MMtpa, is planned to be put online by 2030.

EMA chief executive Puah Kok Keong said about the new agreement with KOGAS, “This partnership with KOGAS is an important one for us in enhancing our knowledge and expertise in the management and procurement of LNG supply”.

“Joint procurement with other LNG buyers can potentially bring benefits to all parties such as better contract terms and pricing”, Puah added.

The agreement on potential joint LNG procurement, signed at the Singapore-Korea Business Forum, builds on an earlier MOU between the EMA and KOGAS. “Under the wide-ranging MoU, EMA and KOGAS will share best practices and knowledge on the procurement and management of LNG supplies, as well as exchange of personnel for training and learning purposes”, the EMA said in a press release June 5.

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