Singapore considers measures to secure energy supply


Singapore has moved to secure its energy supply amid global energy supply disruptions that have kept coal, oil and gas prices at multi-year highs.

The city-state will establish back-up fuel facilities that generation companies (gencos) can rely on if necessary to generate electricity, Singapore’s Energy Market Authority (EMA) said in a statement Tuesday.

“The agency works with all gencos to monitor their fuel supply levels and production capacity. Emergency fuel will be provided to gencos if they are affected or if there is a need to ensure a reliable supply of electricity to consumers in Singapore, ”he added.

Gencos says to stock up on “enough fuel”

The EMA has asked the gencos to contract enough fuel to at least meet customer demands for their retail arms.

The agency also ordered gencos seeking to sell their excess natural gas supply to provide other gencos and the EMA with the first right of refusal, before they can divert or sell the excess gas to other parties.

The Gencos have also been urged to generate electricity using fuel from back-up facilities as needed to maintain system stability.

Extraordinary measure

“These preventive measures are extraordinary but necessary to secure our supply of fuel and electricity. We will examine whether these measures are still necessary by March 31, 2022, ”added the agency.

Singapore supplies 95% of its electricity production from imported natural gas, which exposes it to price volatility. The LNG price in Asia reached record levels driven by strong demand – both in Asia and Europe, low stocks and supply disruptions.

“Rising fuel prices will drive up electricity prices. In addition, the risk of supply disruption has also increased, ”said the EMA.

Gas production problems

Production problems at Indonesia’s West Natuna gas field have resulted in reduced production, which the EMA plans to last until the end of 2021. In addition, gas pressure from Indonesia’s Sumatra province South declined due to higher demand from upstream gas users and Singapore.

“The global energy crisis has made it much more costly for power companies to obtain additional spot LNG (liquefied natural gas) to offset declining pipeline natural gas supplies,” the EMA said.

The agency maintained that Singapore’s overall gas supplies remain adequate. Earlier this year, the EMA appointed two new forward LNG importers, in addition to the existing two, to give gas users in Singapore more options for sourcing the gas they need.

Singapore imports most of its natural gas from Indonesia and Malaysia through pipelines. It also started importing LNG in May 2013, according to the EMA. The Singapore LNG terminal, which started operating in 2013, has four storage tanks with a processing capacity of 11 million tonnes per year.

Read more: China’s power crisis raises commodity currencies in Asia-Pacific

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