Sunday, October 28, 2012

SINGAPORE: Plans to invest S$500 million to build fourth LNG tank

(EnergyAsia, October 29 2012, Monday) — Singapore will invest S$500 million to add a fourth tank to its liquefied natural gas (LNG) terminal by 2017, boosting the total storage capacity to nine million tonnes, said the country's Second Trade and Industry Minister S. Iswaran. (US$1=S$1.22).

The terminal is expected to start up in the second quarter of 2013 with two tanks of total capacity of 3.5 million tonnes to be followed by a third tank of 2.5 million tonnes later in the year, he told the Gas Asia Summit last week.

Singapore LNG Corp (SLNG) is already studying plans to build a fifth tank on the Jurong Island terminal which is designed to accommodate six tanks.

Mr Iswaran said the expansion was in response to Singapore's faster-than-anticipated demand for LNG. Power generation companies and industries have committed to purchasing around 2.7 million tonnes/year or about 90% of the volume contracted for sourcing by BG.

He said the government is studying possible frameworks for future LNG import to allow for competitively-priced and reliable supplies while taking into consideration the needs of consumers and the operational efficiency of the terminal.

Singapore is paying one of the world's highest natural gas prices having signed long-term contracts with Indonesia and Malaysia at a reported 15% premium to spot high sulphur fuel oil. Singapore power generators and chemical producers are paying between US$16 and US$18 per million BTU for piped gas, more than double the price in Europe and five times the US.

"As the cleanest fossil fuel that can now be procured from diverse supply sources, LNG is set to play an increasingly important role in Singapore's energy mix. Hence, we must plan ahead to ensure that our infrastructure can cater to our future energy needs," he said.

Apart from enhancing Singapore's energy security by allowing further diversification of fuel sources, Mr Isawaran said the additional capacity will boost Singapore's role as an international LNG trading hub.

He said the increased storage infrastructure could catalyse business opportunities such as LNG trading, break-bulk services and LNG bunkering.

In a separate speech, SLNG CEO Neil McGregor said LNG could account for 30% of Singapore's gas demand when the terminal begins operating from the second quarter of next year.



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Wednesday, October 17, 2012

MYANMAR: Reforms will help boost economic development, says ADB, GlobalData

(EnergyAsia, October 12 2012, Friday) — Myanmar has the potential to triple its per capita income and become a middle-income nation by 2030 through growing its economy at annual rates of 7% to 8% if it continues to implement sweeping reforms, said an Asian Development Bank (ADB) study.

Consultant GlobalData made a similar pitch for the Southeast Asian state to grow rapidly as it develops into a "natural resources powerhouse".

"Myanmar's strategic location, rich natural resources and abundant labor force leave it perfectly positioned to prosper from Asia's dynamic economic growth," said Stephen Groff, ADB's Vice President for East Asia, Southeast Asia and the Pacific.

"Myanmar could be Asia's next rising star, but for this to happen there needs to be a firm and lasting commitment to reform."

The report, Myanmar in Transition: Opportunities and Challenges, is ADB's first major assessment of the country since it began political and economic reforms last year.

Emerging from decades of self-impose isolation, the country faces major challenges. Only a quarter of its people have access to electricity and only one in five of the country's roads are paved to all-weather standard, while its bureaucracy must be reformed to increase transparency and deliver better public services.

Growth will depend on the country maintaining macroeconomic stability – including measures for low (under 6%) inflation and sustainable budgets, encouraging domestic savings, and investing in human capital and infrastructure.

However, the report warns that the country may also face risks associated with economic liberalisation if the process is not managed prudently. Vulnerability to climate change and environmental degradation, as well as ongoing tension from internal conflicts could also derail the country's future growth.

To strengthen social cohesion and cut poverty rates, the ADB said greater investments are needed in education, health and social services. Although more than half its people rely on agriculture for a living, less than 20% of the country's farmland is irrigated. The report notes that investment in irrigation and other inputs could dramatically expand crop yields and boost incomes.

Myanmar's location between China, India, and other South and Southeast Asian nations leaves it poised to benefit from rising regional trade, tourism and investment, and growing demand for energy and natural resources from its wealthier neighbours.

To fully realise its potential, Myanmar must strengthen its connectivity by improving infrastructure in transport, power and telecommunications services as well as modernising its financial sector. Its economic base must also broaden beyond agriculture to the manufacturing and service sectors to meet a growing demand for jobs.

Having recently established an office in Yangon, ADB said it is studying the possibility of resuming operations in Myanmar, which were halted in 1988.

GlobalData said Myanmar's industrial growth could potentially benefit every strata of society, promoting employment opportunities and economic development, but this would require the country to adopt "holistic development policies" to compete with other middle-income Asian nations.

The consulting firm's report states that Myanmar has started taking steps to boost economic development following the new government's decision to end decades of military rule.

It notes Myanmar's strategic geographical location close to the fast-growing economies of China and India, where raw materials are in huge demand, providing a ready market for its minerals.

Australia and the US have recently lifted economic sanctions previously imposed on the country. New taxes enacted in the mineral-rich economies of Australia and Indonesia have also enhanced Myanmar's appeal as a destination for foreign direct investment (FDI).

The new democratic government has undertaken several national initiatives to develop Myanmar's mineral sector. The country will earn high marks if it follows through on its expressed interest to join the Extractive Industries Transparency Initiative (EITI), a global standard for increasing transparency in the extractive sector.

According to the ADB, the mining sector's contribution to Myanmar's GDP has increased from MMK15 billion (US$2.3 billion) in 2000 to MMK367 billion (US$56.2 billion) in 2010.

Myanmar holds minerals such as lead, zinc, silver, chromium, copper, gold, and precious gems.

The country also has several major oil and gas fields, but a lack of technology and low participation from foreign oil companies has left most of its hydrocarbon reserves unexploited.

In May 2012, the Ministry of Energy took a big step forward by announcing that foreign oil companies will be allowed to participate in exploring and developing 23 offshore oil and gas blocks.

GlobalData said Myanmar held proven 2.1 billion barrels of oil and 25 trillion cubic feet (tcf) of natural gas reserves as of April 2011. Its energy ministry estimates the country has domestic shale oil reserves to be around 3.3 million barrels.

Foreign investments in Myanmar's oil and gas industry reached US$13.8 billion for 2011–2012, representing almost 31% of the country's GDP.

However, GlobalData said the country must implement more investor-friendly policies to increase its share of international investments to help boost its fossil fuel production.

Myanmar faces formidable barriers to developing its economy, said GlobalData.

It struggles with weak governance and corruption, and lacks suitable transport, power and communications infrastructure. Better facilities are required for industry and international trade, and the government must move quickly to develop ports, roads and railways.


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SINGAPORE: Oiltanking acquires Helios Terminal and Chemoil Storage Limited

(EnergyAsia, October 10 2012, Wednesday) — Germany's Oiltanking GmbH said it has agreed to fully acquire Singapore-based Helios Terminal Corporation Private Limited and its holding company Chemoil Storage Limited subject to regulatory approvals.

Commissioned in 2008, Helios' terminal on Jurong Island has the capacity to hold 503,000 cubic metres (cbm). It is equipped with blending facilities and a finger jetty with six berths that can handle up to two Suezmax-size vessels simultaneously.

Oiltanking currently owns and operates two terminals in Singapore with a combined storage capacity of more than 1.7 million cbm. The acquisition will strengthen its position as an independent fuel storage services provider in Singapore and Southeast Asia.

Oiltanking, a subsidiary of privately owned Marquard & Bahls AG, is the world's second-largest independent tank storage provider for petroleum products, chemicals and gases worldwide. The company owns and operates 73 terminals in 22 countries around the world with a total storage capacity of 19.7 million cbm.

Chemoil, a Singapore-listed world leading supplier and trader of marine fuels, also supplies aviation fuel, diesel, renewable and biofuels, base oils and lubricants.


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SINGAPORE: SIEW 2012 interviews John Ng, CEO of Power Seraya.

(EnergyAsia, October 16 2012, Tuesday) — The following article features a Singapore International Energy Week (SIEW) 2012 interview with John Ng, CEO of YTL Power Seraya, the Singapore subsidiary of Malaysia's YTL group.
Q1: How and to what extend has the power generation sector been affected by the economic crises of recent years? What insights and lessons have you gained which have wide implications for Singapore's energy security?

John Ng: The unprecedented global financial and economic crisis of 2008 and 2009 had engulfed many Asian countries, including Singapore. In turn, it had impacted domestic electricity demand and supply. The cyclical economic cycle of 2008/2009 with an abrupt economic downturn followed by a sharp recovery had made it imperative for the energy industry to place greater emphasis on the timing of investment in capital projects as well as commitment to long-term fuel resources.

While Singapore's energy security should be pursued with caution, one must also seek to appreciate the high cost of placing such a high emphasis on it.

Energy policies that seek to address the concerns of rising energy prices and climate change will seek to enhance the nation's energy security. Yet, tradeoffs on competitive electricity prices to the consumers and consequently the social impact to the country must also be taken into account.
Q2: Your business operations, while largely Singapore-focused, are exposed to the variances of the global energy landscape. How has your businesses evolved in tandem with the changes taking place regionally and globally?

Ng: YTL PowerSeraya has always sought to move in tandem with the changes of the energy industry and has since grown from a pure generation company to an integrated energy with a multi-utilities offering, physical oil trading and fuel oil storage services.

As fuel cost is a significant portion of business cost, our trading arm PetroSeraya was set up to complement and grow our existing energy business. Its successful establishment has been one of YTL PowerSeraya's key moves towards completing the value chain from sourcing to end-user.

The policy of reducing exposure to volatile world oil prices, and utilising our every asset such as tanks and jetties, has continued to grow the company's whole value chain, with good success.

With the rise of global climate change issues, along with a global need for fuel diversification, we have over the years switched largely from the use of heavy fuel oil to natural gas. At the same time, we have voluntarily invested in cogeneration technologies that are deriving greater energy efficiencies.

We are also primed to be an active participant of the LNG market when the LNG terminal is ready in Singapore by 2013.

On a regional level, our parent company YTL Power also has operations in Malaysia and Indonesia. With our complementary expertise as a group, we will continue to explore the opportunities available in the region to enhance our energy portfolio.
Q3: As a genco, how are you working with your customers to increase the sustainability of their operations? At a broader level, what role do you see power generation firms playing in shaping a more sustainable future globally?

Ng: We believe efficient use of energy is key, with conservation of energy being the cornerstone to energy sustainability in Singapore. Through our retail arm, Seraya Energy, we have been working with customers on an ongoing basis to help them achieve energy efficiency and savings. This includes relevant energy solutions such as our Greenplus energy package which is bundled with energy management services to help customers improve their energy efficiency.

Our customer portal also provides real-time online access to bills and consumption reports and easy retrieval of customised reports so customers can better access and monitor their energy consumption. As part of our efforts to raise awareness and action on energy conservation, we also seek to educate customers on energy saving tips and to involve in them in our various environmental initiatives such as Earth Hour.

Power generation firms can seek to continuously place a strong emphasis on energy efficiency by taking a close look at energy sources, technologies, waste management and emission control, as well as resource conservation in their business operations.

In addition, power generation firms can work with their local government to support the growth of sustainable energy. Enhancing the company's position by building a strong association to sustainable operations can also help influence customers to think of sustainability in their own operations.
Q4: The energy landscape is evolving in many different directions. From your perspective as a genco, how do you think the Singapore energy landscape will look like 20 years from today?

Ng: In the next 20 years, the local energy landscape will be dominated by the use of natural gas in highly efficient cogeneration plants, which is currently the lowest carbon-emitting fossil that the industry can use to generate electricity.

An ASEAN framework for electricity import may already be in place by then, which can help enhance Southeast Asia's energy security through diversification of sources–allowing us even to tap on energy sources such as geothermal energy, which is not locally available.

To meet the region's demand for energy, the focus will still be geared towards exploring more efficient use of fossil fuels and renewable energy, energy conservation and wider spread adoption of newer technologies such as electric cars, smart grids and microgrids.
Q5: In your opinion, what is the likely scenario that the US will export shale gas to the rest of the world? How do you expect that to impact your business?

Ng: While there is a high possibility, this will still depend largely on the US Administration that is looking to strike a balance between the economics of expanding gas exports and meeting internal shale gas demand such as in power generation and chemical producing industries.

With the completion of the LNG terminal, Singapore can seek to receive more gas supply from other sources. Coupled with the nation's connectivity and infrastructure, the price of natural gas arriving into Singapore is also likely to fall, which can have a positive impact on business and the domestic consumers.

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