Singapore unveils ‘fundamental’ gas supply shift to shore up energy security

The city state relies on gas to generate 95 per cent of its electricity. The move is the latest among several pre-emptive measures taken by the government to safeguard the country’s energy security after surging global gas prices roiled the city state’s electricity market in recent years.

“This is a fundamental shift in our approach toward gas procurement,” Minister for Trade and Industry Gan Kim Yong said at a conference during Singapore International Energy Week. “We believe that this is necessary to create a more stable and secure power system that will ultimately benefit the consumers.”

“This will create greater economies of scale and allow us to negotiate more favourable gas-contracting terms, procure gas from diverse sources to reduce concentration risk, and enter into longer term gas contracts to provide more stable prices and supplies,” he said.

The Ministry of Trade and Industry and the Energy Market Authority (EMA) will create the entity, to be known as Gasco, in 2024 to aggregate gas demand from power generators and purchase additional volumes when electricity demand exceeds expectations, EMA said in a statement.

This will apply to all future gas demand from the power sector, including gas-contract renewals, it said.

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A surge in global gas prices in 2021 created volatility in wholesale electricity markets and forced several power retailers in Singapore to exit.

Separately, EMA and the Maritime and Port Authority of Singapore has also shortlisted six consortiums to develop a low- or zero-carbon ammonia project to generate power and for ship bunkering on Jurong Island, Gan said.

The proposals from the six consortiums will go into a closed request-for-proposal (RFP) stage that will be launched before the end of 2023, and then a lead developer will be selected to jointly develop the project with the government, EMA said in a statement.

The project will generate 55 to 65 megawatt of electricity from imported low- or zero-carbon ammonia, via direct combustion in a gas turbine or combined cycle gas turbine, EMA said.

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The project will also facilitate ammonia bunkering at a capacity of at least 100,000 tonnes per year, starting with supplies from land followed by ship-to-ship bunkering, it added.

Singapore is also building up its expertise to understand advanced nuclear technologies such as small modular reactors, Gan said.

Additional reporting by Bloomberg