Ladies and Gentlemen
INTRODUCTION
1. Good morning, everyone, and welcome to the 18th LNG Supplies for Asian Markets (LNGA) Conference. It is a pleasure to be back here for the 3rd consecutive year, and wonderful to see so many familiar faces among the attendees. Thank you, Dr Fesharaki for the invitation.
2. This year’s theme, “Demand Shock, Cost Inflation, Pricing Challenges & Finding Compromise”, succinctly captures the current LNG sector landscape. Today, I’d like to share my thoughts about how we can find synergies to achieve win-win outcomes.
3. With that in mind, let me outline two vital areas of synergy that the government aims to foster: the synergy between LNG and Sustainability and the synergy between Government and Industry.
Synergy 1 : LNG & Sustainability
4. Let me first touch on the synergy between LNG and Sustainability.
5. As countries worldwide are looking to decarbonise their energy sources in the global green transition, there is concern that renewables may overshadow LNG. On the contrary, this may not be the case. Instead, it is important to understand that LNG remains essential to achieving sustainability.
6. Firstly, LNG serves as a vital transition fuel for countries phasing out coal. With only half the CO2 emissions of coal, LNG enables countries to meet their growing energy needs whilst keeping to their carbon reduction commitments. In rapidly industrialising Asian nations, LNG can help sustain progress as countries scale up other low-carbon energy sources.
7. Secondly, LNG is a baseload fuel, providing energy security as nations pursue decarbonisation efforts. Unlike renewables, which depend on weather conditions and seasons, LNG offers a reliable energy source. It ensures uninterrupted energy supply and grid stability. Pairing baseload energy from LNG with intermittent renewable sources enhances the overall stability and sustainability of the energy system.
8. Thirdly, in the long term, LNG can also facilitate the adoption of low-carbon fuels like hydrogen. Singapore is gradually introducing hydrogen into its energy mix as it will take time and technological advancements for hydrogen use to gain scale and viability. We are starting by blending hydrogen with natural gas in gas turbines. LNG is also used to produce “blue” hydrogen through steam methane reforming and carbon capture and storage technologies. While this represents a shift in how LNG generates energy, its role as a complement to other sustainable energy sources does not change.
9. Singapore recognises the vital role LNG plays in shaping our sustainable future. This is why LNG has been included in the Singapore-Asia Taxonomy for Sustainable Finance, a regional standard jointly developed by and Industry Experts as part of the Green Finance Industry Taskforce (GFIT). Under the taxonomy, responsible LNG projects adopting emission-reduction measures can continue to access financing from climate-conscious capital providers. Near-term emissions thresholds are aligned with today’s leading gas plants, while long-term emissions thresholds are aligned with the use of natural gas blended with low-carbon fuels or with carbon capture and storage for power generation.
Synergy 2 : Government & Industry
10. This brings me to my next point on the synergy between the government and industry.
11. Besides contributing to sustainability, LNG is crucial in bolstering energy security. That is why the government and industry continue investing in Singapore’s LNG industry.
12. We are developing a new second LNG Terminal with a capacity of up to 5 MTPA, ensuring we can meet our growing energy needs. It will also strengthen our position as the world’s largest bunkering hub.
13. In addition, we are setting up a new entity to centralise gas procurement for the power sector. This will enable us to procure gas from various countries and enter into longer-term contracts for greater price stability.
14. These steps reflect our recognition of LNG’s ongoing importance in power generation and industry use. As our economy grows, the demand for natural gas will rise in the medium term. These moves form our proactive approach to ensure sufficient supply.
15. Equally vital are the investments by industry in LNG. We are greatly heartened by the many existing commitments from industry players in Singapore.
16. For example, global LNG players like Chevron and ExxonMobil continue to make significant investments here. They have partnered with Enterprise SG to nurture our next generation of LNG experts under the Leadership Development Initiative for LNG Trading Professionals. Participants will receive practical on-the-ground experience as well as international exposure. Our EnterpriseSG representatives here today will gladly share more about this initiative with you.
17. Furthermore, LNG traders worldwide are also choosing to invest in Singapore. In 2022, Japanese firm JERA (Jeh-Rah), the world’s largest LNG buyer, established a new subsidiary in our city-state, the JERA LNG Portfolio Strategy. Last year, the Swiss MET Group and Japan utilities Kansai Electric set up dedicated LNG trading operations here and announced ambitious plans to expand their Singapore offices. As the leading LNG trading hub in the world, Singapore looks forward to having more players grow our dynamic ecosystem.
18. In conclusion, ladies and gentlemen, Singapore adopts a pragmatic approach to the energy transition. We are confident of the continued importance of LNG in global energy supply chains. Let us foster mutual synergy and a vibrant LNG sector and promote sustainability for a brighter future.
19. I wish all of you a fruitful conference ahead.
20. Thank you.