Speech by Mr Lee Yi Shyan Minister of State for Trade and Industry at the Platt's Top 250 Global Energy Companies Asia Awards Dinner, 13 September 2007 7:50pm at Four Seasons Hotel
Ms Victoria Chu Pao, President, Platt's
Distinguished Guests,
Ladies and Gentlemen,
Good evening,
I am delighted to join you today in celebrating the Platt's Top 250 Global Energy Companies Asia Awards. In particular, I would like to extend a warm welcome to our guests from overseas.
The global energy industry is in exciting times. Energy security and climate change have brought with them new challenges to the global energy landscape. There will be new opportunities arising from these challenges, both in the traditional oil and gas industries, as well as new areas such as alternative energies.
Implications for Energy Companies in Asia
What do these challenges hold for energy companies in Asia? According to the International Energy Agency, or the IEA, the Asia Pacific is expected to increase its share of world energy consumption from 27 per cent currently, to one-third by 2030.China is clearly the largest contributor of this increased demand. In its bid to ensure energy security, China has cast its net far and wide to find new supplies and to diversify its energy sources, from Kazakhstan to Venezuela and Canada.
Demand growth has also led to the expansion of Asian-based integrated oil majors and spurred investments into energy infrastructure within Asia. Petro China is now the world’s second largest energy company by market capitalization, just behind ExxonMobil. Sinopec has also succeeded in becoming Asia’s largest refiner. Just to highlight two examples amongst many. At the same time, opportunities have been created, and we have seen global oil majors, such as Total, BP and Shell, making inroads into the Chinese market, entering into joint ventures for refineries, petrochemical plants and even retail stations. The road to China remains an attractive though challenging proposition for many companies.
Beyond the traditional oil and gas industry, Asian energy companies are diversifying to alternative energies. Some are also supporting alternative energies through the purchase of the electricity output of wind farms. The National Thermal Power Corporation from India for instance plans to add 1000 MW of renewable energy capacity, including 650 MW from wind energies over the next few years. AGL, Australia’s largest energy retailer has committed itself to purchasing the output from one of Australia’s largest wind energy project at Lake Bonney.
On climate change, it will be in Asia’s own interest to develop and deploy emission-reduction technologies. Energy companies have started working towards developing new solutions, and participating in the emerging carbon markets. Tokyo Gas for instance, has brought to market the world’s first commercial fuel cell co-generation systems for households to reduce the reliance on carbon-intensive fuels.
Energy in Singapore
In Singapore, energy is important both as an economic resource and as an industry. As a small country without any significant energy resources, Singapore is exclusively dependent on imports to meet our energy needs. As an island-state, we are also vulnerable to the impact of climate change. Therefore, in formulating our energy policy, we have to ensure that economic competitiveness is balanced by environmentally sustainability. In this regard, improving energy efficiency and investing in clean energy are two key pillars of our energy policy framework.
Last week, the Government announced that Power Gas had been designated to build and operate the LNG terminal. We are aiming for the terminal to be operational by 2012. Concurrently, the Energy Market Authority (EMA) had also launched the Request For Proposal to appoint an LNG aggregator by the second quarter of 2008 to consolidate gas demand from all end users in Singapore and procure LNG from suppliers on their behalf. To spur the growth of the LNG trading sector, the Aggregator will be encouraged to take part in LNG trading activities and returns from such activities will not be regulated by EMA.
The global LNG spot market is growing rapidly. According to BP, short term deals accounted for 13 per cent of LNG volume in 2006, more than double the 5 per cent in 2000.Going forward, LNG spot cargoes could constitute an increasing portion of the LNG imports of major importers including China, Korea, Japan and Taiwan. I am therefore delighted to learn that the market embraces our announcement in May that traders can enjoy the concessionary tax rate of 5 per cent on LNG trading income under the Global Trader Programme.IE Singapore is now in discussion with a number of companies about starting LNG trading in Singapore. Given the synergies and the strong interest, we are optimistic that we will be able to leverage on Singapore’s expertise in oil trading to grow our LNG trading volumes. Similarly, Singapore has designated carbon credits as a qualifying product under the Global Trader Programme. The start of carbon emissions trading will also accelerate the growth of a carbon services sector in Singapore.
In the petroleum and the related petrochemicals sector, ExxonMobil has just announced its multi-billion dollar investment in the new Singapore Parallel Train. Together with Shell’s cracker, this will bring Singapore’s ethylene capacity to over 4 million tons. Going forward, we would also like to raise our oil refining capacity beyond the current 1.3 million barrels per day, which will help to anchor oil trading and price discovery activities in Singapore.
The oil trading sector has made significant achievements; The number of companies trading in oil and chemical products alone under IE Singapore’s Global Trader Programme (GTP) has recently crossed the 100 mark. Nine of the world’s top ten integrated energy companies have joined the programme. In 2006, companies under the GTP handled some US$323 billion of physical trades and US$219 billion of paper trades.
Singapore’s role as Asia’s top oil trading hub has been also drawn interest from Chinese companies. Both Petro China and Sinopec have recently set up their global oil products trading headquarters in Singapore. Amongst the private sector companies, Wanxiang and Bright oil have set up major fuel oil trading and procurement operations in Singapore to tap on the booming Chinese fuel oil markets.
Tonight, I am pleased to hear that this is the second year that Platt's has organized this high profile gathering of global energy companies in Singapore. Platt's plays an important role in providing companies with market intelligence and timely pricing information. Platt's recent plan to launch a trial assessment for biodiesel pricing is a strong signal of the company’s continued commitment to expand its Singapore operations. Singapore will continue to work with Platt's as we grow our energy trading community here.
Thank you.
Distinguished Guests,
Ladies and Gentlemen,
Good evening,
I am delighted to join you today in celebrating the Platt's Top 250 Global Energy Companies Asia Awards. In particular, I would like to extend a warm welcome to our guests from overseas.
The global energy industry is in exciting times. Energy security and climate change have brought with them new challenges to the global energy landscape. There will be new opportunities arising from these challenges, both in the traditional oil and gas industries, as well as new areas such as alternative energies.
Implications for Energy Companies in Asia
What do these challenges hold for energy companies in Asia? According to the International Energy Agency, or the IEA, the Asia Pacific is expected to increase its share of world energy consumption from 27 per cent currently, to one-third by 2030.China is clearly the largest contributor of this increased demand. In its bid to ensure energy security, China has cast its net far and wide to find new supplies and to diversify its energy sources, from Kazakhstan to Venezuela and Canada.
Demand growth has also led to the expansion of Asian-based integrated oil majors and spurred investments into energy infrastructure within Asia. Petro China is now the world’s second largest energy company by market capitalization, just behind ExxonMobil. Sinopec has also succeeded in becoming Asia’s largest refiner. Just to highlight two examples amongst many. At the same time, opportunities have been created, and we have seen global oil majors, such as Total, BP and Shell, making inroads into the Chinese market, entering into joint ventures for refineries, petrochemical plants and even retail stations. The road to China remains an attractive though challenging proposition for many companies.
Beyond the traditional oil and gas industry, Asian energy companies are diversifying to alternative energies. Some are also supporting alternative energies through the purchase of the electricity output of wind farms. The National Thermal Power Corporation from India for instance plans to add 1000 MW of renewable energy capacity, including 650 MW from wind energies over the next few years. AGL, Australia’s largest energy retailer has committed itself to purchasing the output from one of Australia’s largest wind energy project at Lake Bonney.
On climate change, it will be in Asia’s own interest to develop and deploy emission-reduction technologies. Energy companies have started working towards developing new solutions, and participating in the emerging carbon markets. Tokyo Gas for instance, has brought to market the world’s first commercial fuel cell co-generation systems for households to reduce the reliance on carbon-intensive fuels.
Energy in Singapore
In Singapore, energy is important both as an economic resource and as an industry. As a small country without any significant energy resources, Singapore is exclusively dependent on imports to meet our energy needs. As an island-state, we are also vulnerable to the impact of climate change. Therefore, in formulating our energy policy, we have to ensure that economic competitiveness is balanced by environmentally sustainability. In this regard, improving energy efficiency and investing in clean energy are two key pillars of our energy policy framework.
Last week, the Government announced that Power Gas had been designated to build and operate the LNG terminal. We are aiming for the terminal to be operational by 2012. Concurrently, the Energy Market Authority (EMA) had also launched the Request For Proposal to appoint an LNG aggregator by the second quarter of 2008 to consolidate gas demand from all end users in Singapore and procure LNG from suppliers on their behalf. To spur the growth of the LNG trading sector, the Aggregator will be encouraged to take part in LNG trading activities and returns from such activities will not be regulated by EMA.
The global LNG spot market is growing rapidly. According to BP, short term deals accounted for 13 per cent of LNG volume in 2006, more than double the 5 per cent in 2000.Going forward, LNG spot cargoes could constitute an increasing portion of the LNG imports of major importers including China, Korea, Japan and Taiwan. I am therefore delighted to learn that the market embraces our announcement in May that traders can enjoy the concessionary tax rate of 5 per cent on LNG trading income under the Global Trader Programme.IE Singapore is now in discussion with a number of companies about starting LNG trading in Singapore. Given the synergies and the strong interest, we are optimistic that we will be able to leverage on Singapore’s expertise in oil trading to grow our LNG trading volumes. Similarly, Singapore has designated carbon credits as a qualifying product under the Global Trader Programme. The start of carbon emissions trading will also accelerate the growth of a carbon services sector in Singapore.
In the petroleum and the related petrochemicals sector, ExxonMobil has just announced its multi-billion dollar investment in the new Singapore Parallel Train. Together with Shell’s cracker, this will bring Singapore’s ethylene capacity to over 4 million tons. Going forward, we would also like to raise our oil refining capacity beyond the current 1.3 million barrels per day, which will help to anchor oil trading and price discovery activities in Singapore.
The oil trading sector has made significant achievements; The number of companies trading in oil and chemical products alone under IE Singapore’s Global Trader Programme (GTP) has recently crossed the 100 mark. Nine of the world’s top ten integrated energy companies have joined the programme. In 2006, companies under the GTP handled some US$323 billion of physical trades and US$219 billion of paper trades.
Singapore’s role as Asia’s top oil trading hub has been also drawn interest from Chinese companies. Both Petro China and Sinopec have recently set up their global oil products trading headquarters in Singapore. Amongst the private sector companies, Wanxiang and Bright oil have set up major fuel oil trading and procurement operations in Singapore to tap on the booming Chinese fuel oil markets.
Tonight, I am pleased to hear that this is the second year that Platt's has organized this high profile gathering of global energy companies in Singapore. Platt's plays an important role in providing companies with market intelligence and timely pricing information. Platt's recent plan to launch a trial assessment for biodiesel pricing is a strong signal of the company’s continued commitment to expand its Singapore operations. Singapore will continue to work with Platt's as we grow our energy trading community here.
Thank you.