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Investing in LNG infrastructure needed as natural gas is critical to clean energy transition

SINGAPORE – Natural gas is a critical element in the global energy transition, so there is a continued need to invest in liquefied natural gas (LNG) infrastructure, said Minister of State for Trade and Industry Low Yen Ling on Tuesday (Oct 26).
Natural gas is instrumental in helping countries adjust to sharp and unexpected energy demand spikes, hence the LNG market continues to grow in response to strong global and Asian demand and is key to ensuring energy supplies are delivered securely, said Ms Low. “Governments and market players may see this as an opportunity to encourage collaborations, as well as the need to adopt a prudent and scalable approach for the security of LNG supply,” she added.
She was speaking at the 7th Asia LNG and Gas Markets Conference on Tuesday, as part of Singapore International Energy Week at the Marina Bay Sands Expo and Convention Centre.

When burnt for energy, natural gas produces less planet-warming emissions than other fossil fuels such as coal and gas. Natural gas has to be cooled to minus 162 deg C so that it turns into a liquid form for safe transportation. The ongoing gas crunch has resulted in high volatility in energy markets, and countries have turned to diesel and coal to meet demand. “In early October this year, Asia LNG spot prices surged by 40 per cent to an all-time record high of $56 per million British thermal units amid the global supply crunch. Rising power prices have also impacted operations of electricity-intensive industries, and several companies have temporarily cut down production as production costs continued to rise,” said Ms Low.

She noted that countries switching to cleaner energy resources are faced with the intermittency of renewable sources like solar and wind. These will need to be supported by alternate sources, which should ideally have lower carbon emissions. “Therefore, LNG will continue to play a pivotal role in a country’s transition to clean energy. It will remain a key part of most energy systems for decades to come, before low-carbon alternatives such as hydrogen become commercially available,” she said. However, the consideration of natural gas as a transition fuel has been met with scepticism among climate groups worldwide on a number of fronts. For instance, the largest component of natural gas is made of methane, which is considered to be a more potent greenhouse gas than carbon dioxide over a shorter time frame. This means the use of natural gas can worsen climate change.

Others have pointed out that new gas infrastructure could last for a long time, which may not always be consistent with the need to decarbonise economies within a certain time frame. Compared with natural gas, hydrogen is considered a cleaner fuel as it produces no planet-warming carbon emissions.
It also has the potential to be produced and transported globally through “well-developed supply chains just like oil and LNG”, said Ms Low. She noted that a number of countries, such as Australia, Japan, New Zealand, South Korea and Britain, have spelled out their hydrogen strategies and indicated national and corporate interest in developing hydrogen supply chains. However, there are still some key challenges to overcome. “For example, technologies that allow for long-range transportation and long-term storage need to be developed in a cost-effective manner. The cost to use hydrogen also needs to be viable,” said Ms Low.
For hydrogen to be considered a green fuel, it must be generated from renewable resources, which are also subject to intermittency and the forces of nature like the weather. Further technology developments will be needed to minimise such impact, she added.

Cheryl Tan
The Straits Times

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Speech by Second Minister for Trade and Industry Dr Tan See Leng at the LNG and Hydrogen Gas Markets Asia Conference

Distinguished guests, ladies, and gentlemen.

1.           Good Morning. Today marks the first time that the liquified natural gas, or LNG, and Hydrogen Gas Markets Asia Conference is premiering at the Singapore International Energy Week, or SIEW. I would like to thank S&P Global Platts for giving me this opportunity to speak to you on this landmark occasion. This is especially considering that this is also my first time at SIEW, and I am very happy to be able to join you today.

The Role of LNG in Singapore

2.           I would first like to speak on the role of LNG in Singapore, and it is timely that we highlight LNG’s viability as a key fuel source. Climate change is one of the greatest challenges we will face for generations to come, and one that has sparked a strong interest in the use of LNG, as the cleanest fossil fuel, for energy production. Countries seeking to lower their carbon emissions have increasingly shifted towards using LNG, instead of coal, as their primary fuel of choice.

3.           A report by the International Energy Agency, or IEA, noted that, over the last decade, natural gas contributed to one-third of total energy demand growth worldwide, more than any other fuel. Today, it accounts for 23% of global primary energy demand, and nearly a quarter of total global electricity generation. Notably, countries in the Asia Pacific will account for over half of incremental global gas consumption in the coming years. LNG is especially attractive for countries that face constraints in deploying renewables due to limitations in geography, size and a lack of hydro or geothermal resources. This is in addition to its lower carbon emissions relative to other fuels. In short, there is a strong desire for more secure, affordable and clean fuels.

4.           Singapore too, shares this desire. At last year’s SIEW, Minister Chan Chun Sing announced Singapore’s Energy Story – our plan for securing our energy needs. Anchoring the Energy Story are the “Four Switches,” namely, Natural Gas, Solar, Regional Power Grids, and Low Carbon Alternatives. As one of the “Four Switches,” natural gas has been a key element of our energy mix over the last two decades, and having transformed Singapore’s energy landscape thus far, it will continue to power Singapore’s future.

5.           In fact, the growth in demand for LNG in Singapore mirrors the increase in global demand for LNG over the years.In 2001, when we first began using natural gas as an energy source for electricity generation, it made up 26% of our energy mix. Today, that figure has risen to 95%.

6.           Yet it is only more recently, with the liberalisation of Singapore’s energy market and the commencement of operations of the LNG terminal in 2013, that we have been able to tap on LNG on such a large scale. Since then, LNG has played a progressively bigger role in electricity generation and other industry needs.This is exemplified by how many power generation companies started using more efficient gas turbines, and how refineries and petrochemical companies have switched to LNG for their operations.

7.            Even as Singapore shifts towards other cleaner energy sources, LNG will continue to be a substantial part of our energy mix in the near future. Therefore, to support our power generation companies’ bid to improve energy efficiency and reduce carbon emissions, the Energy Market Authority, or EMA, will be awarding $23 million to Tuas Power, Senoko and YTL PowerSeraya under its inaugural Genco Energy Efficiency Grant Call, with a second run of this Grant Call to be launched in January next year. This is just one aspect of three key areas we are working on to achieve our aspirations of a cleaner and more efficient energy future:

• One, diversifying our LNG sources;

• Two, empowering our industry players; and

• Three, exploring new energy solutions.

Diversifying our LNG sources

8.           First, we will continue maintaining a diversified portfolio of LNG sources.This will enhance our flexibility and access to reliable sources, and improve price competitiveness in Singapore’s gas market.

9.           To this end, EMA has issued a Request-for-Proposal in July 2020, to appoint up to two new LNG term importers by the first quarter of 2021.This will increase the number of LNG importers in our ecosystem, allowing gas buyers to have more options to procure gas at better terms and more competitive prices.

Empower our industry players to capture new growth opportunities

10.         Second, we will build up our capabilities and infrastructure to empower our industry players to capitalise on growth opportunities.

11.         According to IEA’s Gas 2020 report, global demand for natural gas is forecasted to grow by 1.5% annually from 2021 to 2025. Singapore, as the main oil trading hub in Asia, is seen as a natural hub for LNG. However, this perception is not something we can take for granted. To establish ourselves as the hub for LNG in Asia as well, we will continue working closely with industry players to ensure that we can capture these growth opportunities.

12. One  major  development  in  our  LNG  industry  was  the  launch  of  EMA’s Expression of Interest in November last year for private companies to build, own and operate an offshore LNG Terminal in Singapore. The terminal will enhance Singapore’s value proposition as a LNG hub by increasing LNG trade flows in the region and providing services that support growing segments in the LNG market, such as bulk-breaking and bunkering. I am happy to note that the Expression of Interest was well-received, and EMA is currently developing a regulatory framework to facilitate the entry of such infrastructure.

13.         This is but one component of “the bigger picture” we aim to achieve.The “bigger picture” is to develop a comprehensive and trusted ecosystem of LNG-related services and infrastructure solution providers.Today, our strategic location in this fast-growing region, pro-enterprise policies and strong support from our financial and legal sectors has seen more than 50 LNG trading or business development companies establishing a presence in Singapore. As we strengthen our LNG trading ecosystem, I am confident that this number will continue to grow, cementing our status as an appealing destination for gas companies and professionals looking to expand their presence here.

Explore new energy solutions

14.         Last but not least, we will explore new energy solutions to meet both our long-term energy needs and low-emissions targets.

15.          Singapore is committed to the global fight against climate change. Our aim is to first halve our peak carbon emissions to 33 million tonnes of carbon dioxide equivalent by 2050, and subsequently achieve net zero emissions as soon as possible in the second half of the century. To achieve this, we must look at emerging technologies that have the potential for further decarbonisation while keeping energy affordable and reliable.

16.         One field where such emerging and potentially game-changing technologies can be seen is in the use of hydrogen for electricity generation. Today, hydrogen is primarily used in industry, for processes such as oil refining and the production of fertilisers. With technological advancements, hydrogen has the potential for much wider usage through reducing carbon emissions in numerous applications across various sectors. As part of the “Four Switches” of the Energy Story, under Low Carbon
Alternatives, Singapore is studying how hydrogen can be feasible for us.

17.         For example, today, natural gas is burnt in combined cycle gas turbines to generate electricity. While natural gas is the cleanest fossil fuel, this process still generates carbon emissions. This is where hydrogen can play its game-changing role. Turbine manufacturers are now developing gas turbines that can burn pure hydrogen for electricity generation – a process that emits no carbon emissions. Using such hydrogen gas turbines would see a significant reduction in carbon emissions in our energy mix.

18.               However, there are three major challenges we must first overcome:

• First, global supply chains for hydrogen need to be established;

• Second, extensive infrastructure for hydrogen import, storage, transport and end-use need to be put in place; and

• Thirdly, the current price of producing and importing hydrogen is high, making wider adoption difficult.

19.         The Singapore Government still sees hydrogen as an important energy solution, and we have taken three initial steps to overcome current challenges, and understand and chart the role that hydrogen can play in our future energy landscape. First, to assess the feasibility of hydrogen in reducing longer-term emissions, various government agencies commissioned a joint study on hydrogen imports and downstream applications in Singapore last year. This study will cover potential sources of hydrogen imports based on availability, cost, technical feasibility and supply security up to 2050;

20.          Second, Minister Chan announced just yesterday that the Government will devote funds to support our local research community to develop and test-bed promising low-carbon energy technologies, including hydrogen technologies; and

21.         Last but not least, we are strengthening our partnerships with international bodies and other countries to keep pace with global technological developments, and to work together on practical projects to develop hydrogen markets, supply chains and standards. For example:

• Yesterday, Singapore signed a Memorandum of Understanding, or MOU, with Australia to drive cooperation on low-emissions solutions including hydrogen.

• Singapore is also working with other like-minded partners, such as Chile, to conclude a MOU to study the R&D, application, supply chain and standard setting for the deployment of hydrogen.

22.         However, none of this would have been possible without our local industries, and we are greatly heartened by their efforts. Let me list two examples:

• First, in March this year, five Singapore companies signed a MOU with two Japanese companies, Chiyoda Corporation and its main shareholder, Mitsubishi Corporation, to develop ways of utilising hydrogen as a green energy source.

• Second, in 2019, Singapore’s energy utilities company, SP Group, launched a concept lab that uses solar power to produce hydrogen, which can in turn produce electricity when needed.

These are but a snapshot of efforts across the industry, and we look forward to more industry-led partnerships on various low-carbon hydrogen pathways in the future.


23.          In conclusion, energy – and the fuel sources used to generate it – form the bedrocks of an economy and powers it forward. LNG has proven to be such a bedrock. For the present and the foreseeable future, it will not only continue to play a substantial role in Singapore’s energy mix, it will also help the world address the challenges of climate change. For the further, but not-too-distant future, advancements in technology will increasingly see hydrogen become a key energy resource. It too could become a bedrock of our economy by helping us meet climate change goals and needs.

24.         However, to harness these resources, industries, organisations, and governments have to work together to plan and implement new strategies to ensure that today’s needs are met whilst addressing tomorrow’s challenges. I am glad that we have thus far proven ourselves up to this task, and I would like to encourage everyone here today to continue looking forward to achieve our goals. In this regard, Singapore stands ready to work with like-minded partners from around the world, and I hope that today’s conference would be the start of many more partnerships that will enable us to create a brighter, low carbon energy future together. On this note, I wish you a fruitful and productive conference. Thank you.

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Singapore will continue to rely on natural gas amidst push to boost solar capacity

SINGAPORE – Solar energy would by 2030 make up a greater share of Singapore’s energy mix, but natural gas, a fossil fuel, would still be the Republic’s dominant fuel in the near future, Minister for Trade and Industry Chan Chun Sing said on Tuesday (Oct 29).
Singapore has limited access to renewable energy options such as geothermal or wind power, Mr Chan said during the opening session of Singapore International Energy Week. But the Republic will scale up its efforts to harness sunshine, the one thing that is plentiful on the island, with a new target of increasing installed solar capacity by more than seven times from current levels to reach 2 gigawatt-peak by 2030.
Yet, harnessing solar power will not come without challenges, including cost, urban shading and the intermittency of sunshine due to cloud cover, for example.

Said Mr Chan: “We will continue to rely on natural gas for the next 50 years for a substantial part of our energy needs.”
Natural gas and solar energy are two of the four “switches” that Singapore will depend on for its energy needs, Mr Chan said. It will also explore a regional power grid and low-carbon alternatives.
More than 95 per cent of Singapore’s energy now comes from natural gas, which it imports in liquefied forms from all over the world and through pipes from neighbouring Indonesia and Malaysia.
Singapore is moving towards a future of cleaner, affordable and reliable energy, Mr Chan said. The city-state began this journey in the early 2000s , as it transitioned away from oil to natural gas, he said.
Now, it will look to ramping up solar, and making its natural gas plants more efficient.
In the longer term, Singapore could be plugged into a regional power grid to trade electricity with its neighbours, which would increase its energy security, even as the Republic invests in research and development in other low-carbon technologies that, unlike solar energy, had yet to become commercially viable.

Natural gas is the cleanest fossil fuel. It emits 50 to 60 percent less carbon dioxide when burnt in a new, efficient natural gas power plant compared with emissions from a typical new coal plant, according to the United States Union of Concerned Scientists.
When compared with diesel, natural gas produces about 30 per cent less carbon dioxide emissions, figures from the US Energy Information Administration show. But if natural gas, which largely comprises methane, leaks before it is burnt, there could be repercussions on global climate. This is because methane is a more potent greenhouse gas compared with carbon dioxide. The latest assessment report by the Intergovernmental Panel on Climate Change said methane is 28 times more efficient than carbon dioxide at trapping heat on the planet.
Methane contributed just 0.39 per cent of Singapore’s emissions in 2014, said a report Singapore submitted to the United Nations Framework Convention on Climate Change last December.

The authorities are taking measures to reduce the chance of such leaks, and to boost the reliability of the gas network.
The Energy Market Authority (EMA) said conventional leak detection methods require intensive human involvement without automation and also rely heavily on customer reports on gas service problems, instead of direct detections. EMA had previously funded a project to identify and detect anomalies in the gas pipeline network via a system involving a variety sensors and a computer algorithm. Vigti is a spin-off from the project which was successfully completed early this year and there are plans to scale this up further, said EMA. Separately, in response to queries on Singapore’s only coal-fired plant on Jurong Island, an EMA spokesman said the use of coal is carefully managed.

The facilities on Jurong Island use a variety of fuel, she said, and the Tuas Tembusu Multi-Utilities Complex was set up to provide utilities such as steam and electricity to chemical companies on Jurong Island.
The EMA spokesman added that the greenhouse gas emissions from the complex is similar to that of existing fuel oil plants in Singapore’s system today, as the complex uses “a mix of clean coal and biomass to produce steam and electricity”.
Asked on future plans for the coal plant, she said Singapore would continue to improve the technology or retro-fit certain parts of gas-fired plants to improve efficiency and produce much cleaner energy.
“We are working on adopting more solar energy, importing from the regional grid, and exploring emerging low-carbon technologies,” she added.

Audrey Tan
The Straits Times