Samsung C&T has sealed its bid to build Singapore's first liquefied natural gas terminal, Singapore's Energy Market Authority revealed.
A Bloomberg report said the import terminal, costing a total S$1.5 billion ($1.1 billion), will have a capacity of 3.5 million metric tons a year. It is expected to begin operations by 2013, even as the government had earlier targeted a 2012 startup.
Singapore currently buys its natural gas from neighboring Malaysia and Indonesia.
With the LNG project, Singapore may be able to diversify its energy supply and eliminate the risk of a repeat of gas supply cuts from Indonesia, which caused blackouts in November 2003 and June 2004.
The report added the import facility may cost S$1 billion to build, but Samsung’s contract indicates a lower value, said state-owned Singapore LNG Corp.'s executive director Neil McGregor.
He, however, declined to give the value.
Korea Gas Technology Corp., a unit of Korea Gas Corp., is set to design the gas storage tanks for the project, according to Lee Sang Hyup, company general manager.
Samsung C&T vice president Paul Shin meanwhile said the terminal will have two tanks with capacity of 180,000 cubic meters each, while a third may be added optionally.
McGregor disclosed the terminal may use the first tank for domestic use and the second for re-exporting LNG cargoes and trading the fuel.
Loans and equity from the Singapore government, which took over the project last year because of reduced funding in light of the global financial crisis, will fund the project.
As this developed, the BG Group Plc., the biggest supplier of LNG from the Atlantic Basin to Asia, clinched a 20-year contract to provide the fuel to the import terminal beginning in 2012.
About 800,000 tons to 1.2 million tons will be supplied by the company every year, and as demand rises that will increase to 3 million tons by 2018, the Energy Market Authority earlier said.
Energy Market Authority chief executive officer Lawrence Wong said BG may complete negotiations to sell as much as 1.5 million tons of the fuel to utilities in Singapore “very soon,” which is just half of what it has agreed to bring in to Singapore.
Foster Wheeler Corp. was likewise awarded a contract for consultancy services for the LNG plant.
Located on the south-western part of Jurong Island in Singapore, the terminal may have provisions for an expansion to 6 million tons a year, the report stated.
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