The Energy Market Authority (EMA) announced today that the new restructured gas market will be operational with effect from 15 September 2008. As part of this new gas market, the gas transportation business will be separated from the competitive businesses of gas import and retail. A set of rules called the Gas Network Code (GNC) will govern the activities of gas transportation, providing open and non-discriminatory access to the onshore gas pipeline network.

The restructuring of the gas market is to support the liberalisation of the electricity industry, by providing a competitive source of natural gas for electricity generation. About 80 per cent of our electricity is generated using natural gas. Over the past few years, the EMA has worked closely with industry players to put in place the new gas and electricity market structures. Today, about 75 per cent of Singapore’s electricity demand is opened to retail competition.

With greater competition in the gas and electricity sectors, benefits of competition will flow through to consumers in terms of competitive prices and more choices of electricity/gas retailers. Since the start of electricity market liberalisation in April 2001 till July 2008, while fuel oil prices have risen by about 190 per cent ($38.30 per barrel to $112.35 per barrel), electricity tariffs for households have increased by about 25% (19.87 cents/kWh to 25.07cents/kWh).

Gas Network Code (GNC) provides open and non-discriminatory access to the on-shore gas pipelines

To facilitate the smooth running of the new gas market, the GNC has been drawn-up by the EMA in consultation with industry players. The GNC outlines the common terms and conditions between the gas transporter (i.e. PowerGas Ltd) and those industry players who engage the transporter to transport gas through the gas pipeline network. With the GNC, the suppliers and users of natural gas will have open and non-discriminatory access to the entire on-shore gas pipeline network in Singapore.

Streamlining of Gas Pipeline Ownership

To ensure the gas transporter is not commercially conflicted, PowerGas Ltd will not be allowed to participate in those parts of the electricity and gas business which are open to competition.

Sembcorp Gas Pte Ltd which currently has diversified interests in gas transportation, import and retail businesses, will exit from the gas transportation business and transfer its gas pipelines to PowerGas Ltd, via a statutory transfer under Section 98 of the Gas Act.

Section 98 of the Gas Act empowers the Minister for Trade and Industry, with the agreement of the Minister for Finance, to determine the terms of the statutory transfer of pipeline assets from Sembcorp Gas Pte Ltd to PowerGas Ltd. The terms of the transfer will be set out in Regulations under the Gas Act which will be gazetted on 15 September 2008.


11 September 2008

For media enquiries on the New Gas Market and GNC, please contact:

Ms Chung Puay Noi, Manager, Corporate Communications
Tel: 6835 8012 (Office) 6835 8020 (Fax)
Email: chung_puay_noi@ema.gov.sg

Ms Jenny Teo, Director, (Corporate Communications)
Tel: 6835 8186 (Office) 6835 8020 (Fax)
Email: jenny_teo@ema.gov.sg

For media enquiries on gas pipeline transfer, please contact:

Ms Khong Su-vie, Deputy Director (Corporate Communications)
Tel: 6332 7705 (Office), 9099 9763 (Mobile), 6334 0306 (Fax)
Email: suvie_khong@mti.gov.sg


About Energy Market Authority (EMA)
EMA was established in the 2001 to forge a secure, long-term electricity industry that thrives on healthy competition. New market structures have been created to promote competition in the electricity and piped gas industries. EMA will also continue to promote cost competitive outcomes for consumers by ensuring a level playing field for competition within the electricity and piped gas industries.