SINGAPORE (Businesshala) – Singapore LNG Corp is making inquiries about buying LNG cargo from the spot market, a rare move for an operator of the city-state’s liquefied natural gas (LNG) terminal, industry sources said on Wednesday. .
India is being questioned over rising global prices of power generation fuels such as LNG and coal amid power shortages in Europe from China and India.
SLNG contributes to Singapore’s energy security and its terminal supplies up to 30% of the city state’s natural gas for electricity generation, its website says.
SLNG is looking for LNG privately in the spot market, four sources said, with one of them seeking two cargoes for delivery in Singapore in November.
It was not immediately clear why SLNG was seeking cargo or if the request was tenacious.
The company and the Energy Market Authority of Singapore (EMA) did not immediately respond to a Businesshala request for comment.
It is unusual for Singapore to seek spot LNG cargo as the country is usually adequately supplied with LNG through long-term deals and gas imports from Indonesia through a pipeline. One of the sources said the request from SLNG came after Singapore’s electricity prices jumped.
Singapore’s monthly base load electricity futures have more than doubled since the beginning of the month, while quarterly base load electricity energy futures are trading at their highest level since contract opening in 2015.
About 95% of Singapore’s electricity is generated from imported natural gas, with the country’s long-term gas and LNG cargo linked to oil prices.
Spot LNG prices in Asia hit record highs last week, while Brent crude oil futures hit a multi-year high this week. Singapore is the Asian trading hub for LNG and aims to capitalize on the expected growth demand for LNG in the region.
There are currently four companies that have licenses to import LNG into the city state under long-term contracts of one year or more, which allow them to sell LNG in Singapore.
Spot LNG can be imported as LNG or re-gasified LNG for local use by Singapore gas users, although the annual volume allowed under long-term gas sales agreements for both LNG and piped gas is 10% of the total contracted gas volume. on is limited. According to the website of SLNG.
Singapore’s long-term pipe gas contracts with Indonesia begin to expire in 2023, when the country plans to import more LNG from the global market.