Tan Sri Mohd Hassan Marican, Chairman, Pavilion Energy

Distinguished Guests,

Ladies and Gentlemen

Introduction

1.                  Good afternoon. I am pleased to join you at this ceremony to commemorate the arrival of Pavilion Energy’s inaugural Liquefied Natural Gas (LNG) cargo into Singapore, which represents another milestone for Singapore’s energy sector.  

Development of Pavilion’s Natural Gas Businesses

2.                  Pavilion has been an active player in the LNG sector. It was awarded an LNG bunker licence in 2016 and started the first truck-to-ship LNG bunkering operations in South East Asia last year. In addition, Pavilion has a two-year storage deal with Singapore LNG (SLNG) for LNG trading activities, including LNG break-bulk and other small scale LNG activities.

3.                  In October last year, Pavilion Energy was awarded a licence for three years to import up to 1 million tons of LNG per annum. Together with a similar franchise awarded to Shell Gas Marketing, gas buyers will benefit from greater contract flexibility and a wider pool of sources. This inaugural cargo therefore marks an important development in Pavilion’s growing expertise to import LNG.

Regional Gas Development

4.                  It is timely that we have companies like Pavilion who have sited their natural gas businesses in Singapore. While the bulk of Asian LNG demand resides in North East Asia, natural gas demand in South East Asia is rapidly growing.

5.                  LNG is used to meet close to half of Asian gas demand, and this is set to increase as South East Asia moves from a net exporting region to an importing region. Conventional LNG exporting countries such as Thailand and Indonesia are expected to become net LNG importers towards the end of the decade, as their domestic gas production declines. At the same time, new LNG market entrants, such as Pakistan, Bangladesh, and Sri Lanka, are expanding their LNG import infrastructure to meet growing electricity demand.

6.                  Other environmentally driven policies such as the International Maritime Organization’s (IMO) sulphur cap of 0.5% in marine fuel, may spur added demand from shippers for the use of LNG as an alternative to High Sulphur Fuel Oil (HSFO) for bunkering fuel.

Singapore’s Infrastructure Development

7.                  Singapore is well-placed to take advantage of these trends and offer LNG traders the prospect of unlocking new business in the region due to our strategic location, availability of LNG infrastructure, and developed trading ecosystem.

8.                  Alongside the establishment of new LNG players such as Pavilion, the Government has taken further steps to strengthen our position as a regional gas hub.

9.                  For example, SLNG will complete the construction of its 4th tank by the first half of this year. This will be the world’s largest tank and will increase our storage capacity to a total of 800,000 cubic meters. SLNG will soon call for proposals to use its spare terminal capacity.

10.              SLNG will also modify its jetty to take vessels as small as 2,000 cubic metres by 2019. This will enhance SLNG’s ability to break-bulk, and to meet small scale regional demand that requires smaller LNG volumes, such as LNG-to-power barges.

11.              To further augment Singapore’s development as a gas price discovery and trading hub, the Energy Market Authority (EMA) has allowed gas buyers to procure LNG on a spot basis as of January 2018, subjected to a market-wide cap of 10% of our long-term contracted gas supplies.

Conclusion

12.              We welcome companies like Pavilion to contact SLNG to explore the many opportunities that Singapore offers. I also wish Pavilion every success and look forward to witnessing its continuous contribution to the LNG sector in Singapore.  Thank you.