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To ensure a competitive market, the gas industry in Singapore is structured in a way that fosters competition.
To ensure a competitive electricity market, the gas industry has been restructured since 2008. The gas transportation business is distinct from the competitive sectors of gas import, shipping and retail.
The activities of gas transportation are governed by a set of rules known as the Gas Network Code, ensuring fair and equal access to the onshore gas pipeline network.
In Singapore, there are two distinct gas pipeline networks – one for town gas and another for natural gas.
Town gas, produced by City Energy Pte Ltd, is mainly used by residential and commercial customers for cooking and heating purposes. Natural gas, on the other hand, is mainly used for power generation and industrial feedstock and is imported through licensed gas importers.
PowerGas, as the licensed gas importer, owns the town gas and natural gas pipelines. It is responsible for transporting both types of gas to consumers who purchase gas from gas shippers and retailers.
In the early 2000s, Singapore relied on imported piped natural gas from Indonesia and Malaysia for power generation.
From May 2013, Singapore further diversified its gas sources to importing liquefied natural gas (LNG). The SLNG Terminal, operated by SLNG Corporation, began operations with a jetty, two storage tanks and a throughput capacity of 3.5 million tonnes per annum (mtpa). Situated on a 40-hectare plot on Jurong Island, it was built at a cost of S$1.7 billion.
Today, the terminal operates with two jetties, four storage tanks and a peak send-out capacity of 11 mtpa.
The SLNG Terminal plays a key role in contributing to Singapore's energy security. (Photo courtesy of SLNG Corporation)
EMA licenses term LNG importers to ensure competitive and reliable import and supply of regasified LNG to gas users in Singapore. These licenses cover Gas Sales Agreements with durations of one year or longer.
BG Singapore Gas Marketing (now known as Shell Gas Marketing Pte Ltd) was awarded the first exclusive franchise to import and sell up to 3 mtpa of LNG or until 2023, whichever is earlier. Pavilion Gas Pte Ltd and Shell Eastern Trading (Pte) Ltd were awarded to import the next tranche of LNG, with each of them allowed to market up to 1 mtpa of LNG or for 3 years, whichever is earlier.
Currently, there are four licensed term LNG importers:
To ensure adequate and secure gas supplies going forward, EMA is exploring ways to aggregate gas procurement and obtain longer term and more secure gas contracts.