Mr Seah Moon Ming, Chairman, International Enterprise (IE) Singapore
Distinguished Guests,
Ladies and Gentlemen,
Introduction
1. Good morning. It is my pleasure to join you at this inaugural Gas Roundtable organised by the International Enterprise Singapore. This is an important platform for Singapore companies to gain insights about the upcoming trends and growth areas in the gas market, and to explore opportunities for collaboration with potential partners across the gas value chain.
2. Global events over the past few years have made this a challenging period for companies in the natural gas sector, including supporting industries such as the offshore and marine industry sector.
3. The first factor is the slowdown in gas demand growth. Growth in demand for gas is expected to be slow over the next few years due in part to the muted economic recovery in many advanced economies such as the United States and Europe. In its medium term gas market report for 2016, the International Energy Agency (IEA) stated that since 2012, global gas demand has aincreased by just 1% a year, compared to 2% annually from 2006-2015.
4. The second factor that has exacerbated the situation globally is the prolonged downturn in oil and commodity prices, which has a knock-on impact on gas prices and demand for offshore and marine services.
5. Nonetheless, we believe that the natural gas sector still presents valuable opportunities in the longer term. The advantages offered by natural gas, such as its environmental advantages and relative abundance compared to other fossil fuels, is expected to help it make up 30% of the global energy mix by 2035. At the same time, there are new developments outside the traditional LNG space which are gaining traction and offer opportunities as well. These include growth in small-scale LNG technologies and floating offshore solutions. Hence, Singapore companies should look into ways to remain resilient while building capabilities in these new areas of growth.
Positioning Singapore as a regional LNG hub
6. When I attended the G20 Energy Ministerial Meeting in June this year, I underscored Singapore’s support for enhancing energy market access in the Asia Pacific, a region which is expected to see the largest rise in natural gas demand. This will require infrastructure and transportation links for gas delivery to consumers. Singapore is in a unique position to support this growth, having already undertaken several key developments in our local LNG sector. Let me highlight 3 of them today:
7. First, we have the physical infrastructure. The Singapore LNG terminal has been operational since 2013 and is being expanded. Its throughput capacity will increase from 6 to 11 million tonnes per annum by 2017, while the fourth tank will be completed by 2018. This will increase the terminal’s ability to support storage, reloading and break-bulking of LNG for our region.
8. Second, as the leading bunkering hub in the world, we are taking the lead in the area of LNG bunkering. In addition to the harmonisation of LNG bunkering standards and procedures at both the national and international levels, the Maritime and Port Authority (MPA) awarded two licenses for the supply of LNG bunkers, and will fund up to S$12 million to build six LNG-fuelled vessels. The LNG bunker supply licensees will be developing the necessary infrastructure for the delivery of LNG bunkers in the Port of Singapore.
9. Third, over and above these government efforts, the private sector is playing an important role in developing Singapore as a pricing hub for LNG. The Singapore Exchange (SGX) and the Energy Market Company have launched the Singapore SGX LNG Index Group, a weekly LNG spot price index that can serve as an Asian gas price.
10. While Singapore has taken significant steps in growing the LNG sector here, we hope to do more to enhance our ability to provide LNG solutions for the region.
Transformation of capabilities to succeed
11. This Roundtable organised by IE is therefore significant as it brings together parties involved in the LNG sector to share on the opportunities in the overseas markets, and how Singapore companies can develop their capabilities in the LNG sector to develop track records and capture value in this growing market.
12. One good example of a company that has been working closely with IE Singapore to access gas opportunities in overseas markets is Sing Swee Bee. Sing Swee Bee was established to specifically cater for the Gas and Energy industry’s demand for industrial gases as well as cryogenic products and services in the region.
13. Leveraging on its existing capabilities and working closely with industry partners, Sing Swee Bee has made good headway into the LNG membrane testing market, transforming itself from a stockist to a key provider of cryogenic services. They currently own Asia Pacific’s largest fleet of T-75 ISO tanks, used for the transportation of LNG, and also command 44% of global market share in Non-Destructive Tests for LNG Membrane Vessels. Through IE Singapore’s assistance, the company has also expanded into leasing of ISO tanks in Vietnam, as well as small-scale LNG supply chain solutions for the Indonesian market.
Conclusion
14. I hope more Singapore companies will closely consider how they can exploit the many opportunities in the gas sector. The timing is right for companies in traditional oil and gas services, as well as engineering businesses, to consider diversification and building up their capabilities to harness the long term opportunities that may arise in the gas industry. Besides providing opportunities for our companies, these exciting developments in the LNG sector also offer good PMET job opportunities for Singaporeans.
15. Companies should continue innovating to remain relevant in the developing LNG sector. IE Singapore stands ready to work with you to capitalise on overseas market opportunities.
16. Thank you and I wish you a fruitful and productive conference.