Uchenna Izundu
International Editor
LONDON, Apr. 18 -- BG Group PLC and Singapore's Energy Market Authority (EMA) have signed a memorandum of agreement for BG to provide as much as 3 million tonnes/year of LNG for up to 20 years, starting in 2012.
The deal underpins Singapore's desire to enhance its energy security and marks the first time it will become an LNG importer. It also has expressed a desire to create an LNG trade hub with spot cargoes.
BG Group, sourcing LNG from its global portfolio, will supply the LNG to the import terminal on Singapore's Jurong Island that also is scheduled for completion in 2012. PowerGas Ltd., a wholly owned subsidiary of Singapore Power Ltd., was contracted to build, own, and operate the terminal.
The plant's capacity can be expanded to 6 million tonnes/year and ultimately to 10 million tonnes/year by the mid-2020s.
Both parties declined to reveal the value of the agreement, saying only that the deal had been concluded at "competitive rates."
BG Group is the leading exporter of Atlantic Basin LNG to Asia Pacific markets. It has long-term purchase agreements with Equatorial Guinea LNG; Nigeria LNG; Egyptian LNG; and Atlantic LNG in Trinidad and Tobago. It also supplies natural gas to Atlantic LNG and Egyptian LNG and holds an equity stake in both facilities.
BG Group also has joined Queensland Gas Co. Ltd. in developing a 3-4 million tonnes/year liquefaction plant in eastern Australia.
EMA was established in 2001 to oversee development of a competitive, long-term energy industry. Last May, the Gas (Amendment) Bill was passed, opening up gas industry access.
Contact Uchenna Izundu at [email protected].