In this list
Electric Power | LNG | Natural Gas | Oil

Singapore's power utilities may switch to LNG on Indonesian piped gas curtailments

Electric Power | Electricity | Energy | Coal | Thermal Coal | Natural Gas | Natural Gas (North American) | Oil | Crude Oil | Refined Products | Metals | Steel

Market Movers Americas, Oct. 3-7: Oil and gas producers may cut capex in 2023, rail could impact coal to US power plants

Electric Power | Electricity | Energy | Energy Transition

European Long-Term Power Forecast

Petrochemicals | Oil | Energy Transition

Trainings courses at Global Carbon Markets Conference

Energy | Electric Power | Energy Transition | Natural Gas | Oil | Electricity | Renewables | Refined Products | Jet Fuel | Emissions | Crude Oil

'World should be worried' by lack of spare oil output capacity: Aramco CEO

Energy | Natural Gas | Natural Gas (European) | Natural Gas Risk | Oil

Fuel for Thought: North Sea oil drone threat prophesied in the Middle East

Singapore's power utilities may switch to LNG on Indonesian piped gas curtailments

Singapore's power utilities may have to switch to using LNG due to curtailments in piped gas supplies from Indonesia, the country's energy regulator the Energy Market Authority said in a statement Oct. 15.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The reduction in pipeline gas supply comes after prices of spot electricity futures on the Singapore Exchange, or SGX, spiked in recent days and the operator of the LNG terminal, Singapore LNG Corp., said it was looking to boost gas inventory to bolster energy supplies.

"Spot electricity prices in the Singapore Wholesale Electricity Market fluctuate every half-hour depending on prevailing demand and supply conditions," EMA's spokesperson said.

"The recent spike in Uniform Singapore Energy Price could be attributed to a number of factors, including higher than usual electricity demand, the outage of several generation units, curtailments of gas from West Natuna, as well as low landing pressure of the gas supplied from South Sumatra," the regulator added.

Singapore's utilities source 95% of the country's electricity from natural gas and its gas supply comes via pipelines from neighboring hydrocarbon exporters Indonesia and Malaysia, and also from seaborne LNG cargoes.

"Under standard operating procedures, generation companies will switch from piped natural gas to alternative fuel sources such as liquefied natural gas or diesel should gas pressure drop below certain levels," the EMA said.

"This ensures that power supply remains stable and reliable during such low-pressure situations," the government agency said.

July curtailments

On Oct. 15, the EMA published a regulatory update highlighting Indonesian gas curtailments that happened between July 26 and 29 when there was "an unplanned curtailment of piped natural gas supply imported from Indonesia, West Natuna, due to an incident at an upstream production facility."

It said this coincided with a planned curtailment for maintenance and the overall reduction accounted for up to 16%-20% of the total gas supply to Singapore. During the period of reduced supply, the USEP wholesale price of electricity averaged at S$418/MWh (US$310.10/MWh) compared to S$143/MWh over the preceding five weekdays, the EMA said.

It said it had worked with SembCorp Gas Pte Ltd, which was the main importer for West Natuna pipeline gas, to supply regasified LNG to the affected users that included several electricity generation companies.

"The ability of the non-affected Gencos to generate more electricity was also constrained by their contracted daily gas supply quantities and the operating limits to maintain stable and adequate gas delivery pressure in the gas supply system," the EMA said in its update, but added that no breach of market rules was determined during the disruption.

The EMA update potentially signals that Singapore's pipeline gas supply from Indonesia is likely to be increasingly unstable and may push suppliers to look for long-term alternatives including more term LNG contracts.

One source involved in power trading said that Singapore's utilities have been advised to prepare for 1%-5% supply curtailments in the current disruption. The EMA has not provided details on scale of ongoing gas curtailments.

Pipeline gas dynamics

Singapore has two standing agreements with Indonesia for the supply of pipeline gas -- the first for gas from offshore fields in the Natuna Sea and the second for supplies from the Grissik plant in South Sumatra to Singapore via Batam.

The 468-km Grissik-Batam-Singapore pipeline carries gas from Indonesia's Sumatra island to Singapore under a 20-year contract that started in 2003. The 654-km West Natuna-Singapore subsea gas pipeline underpins the second contract also due for renegotiation in the middle of this decade.

Singapore has for years evaluated a shift toward LNG as piped gas supply contracts expire and Indonesia and Malaysia grapple with their own domestic production and demand constraints. There has been uncertainly around whether expiring contracts will be renewed, changing pricing mechanisms and risks around resource nationalism.

Indonesia has previously announced plans to halt supply to Singapore from the Suban Field in the country's Corridor Block, which is managed by ConocoPhillips, when the contract expires in 2023, and redirect gas for domestic use to state-run gas distributor Perusahaan Gas Negara, or PGN.

Singapore decided to diversify to LNG when its SLNG terminal began operations in May 2013 with an initial throughput capacity of 3.5 million mt/year, to be expanded to 15 million mt/year. Singapore has been looking to build a second terminal recently that could be a floating import facility.

EMA has previously stated that according to demand and supply projections new regasification may be required only in the later part of the next decade, but ongoing disruptions could see those estimates revised.

Utilities will be prompted to sign more long-term LNG contracts. Some of Singapore's key power producers are Tuas Power, Senoko Energy, YTL PowerSeraya, Keppel, SembCorp and PacificLight Power, while its main gas retailers include SembCorp Gas, Pavilion Gas, City-OG Gas Energy Services and City Gas.