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SINGAPORE – Singapore continues its push towards cleaner and more sustainable energy sources, and Pavilion Energy, owned by Temasek, signed a 10-year purchase agreement with the world’s largest liquefied natural gas (LNG) producer, Qatar Petroleum, the Monday (November 9).
The deal will see Qatar Petroleum supply up to 1.8 million tonnes of LNG per year to Singapore starting in 2023.
Each LNG cargo delivered under this agreement will be accompanied by a statement of the greenhouse gas emissions associated with the shipment.
This partnership not only strengthens Singapore’s LNG supply, but also contributes to the development of more sustainable natural gas strategies.
Global demand for LNG has accelerated in recent years, and natural gas is considered the cleanest form of fossil fuel for energy production. In 2018, Singapore’s natural gas consumption was roughly the equivalent of 9 million tons of LNG per year.
The Singapore LNG terminal, which has four tanks, has a regasification capacity of around 11 million tons per year.
The agreement between Pavilion Energy and Qatar Petroleum is the result of a tender launched by Pavilion Energy earlier this year, which seeks not only the supply of LNG but also ideas for the reduction of greenhouse gas emissions, as well as the quantification and reporting methodology for LNG throughout its journey from the well to the port of discharge.
Company president Mohd Hassan Marican said that the deal with Qatar Petroleum not only represents the company’s ability to supply LNG reliably and competitively to Singapore, but is also a bold step towards the energy transition.
Pavilion Energy is currently one of the two forward importers of LNG in Singapore, along with the oil giant Shell.
“This partnership will strengthen our Singapore core market and our role as a global energy trader,” said Tan Sri Marican.
Speaking at the signing ceremony on Monday, Second Minister of Trade and Industry Tan See Leng called the agreement “an important and innovative development for the LNG industry”, noting that the companies have committed to developing a methodology to quantify carbon emissions for each LNG shipment. .
“This will pave the way for increased demand for carbon offset projects to reduce the emissions associated with the LNG supply chain,” said Dr. Tan.
Countries and companies looking to reduce their carbon emissions are naturally shifting to natural gas, he said. He noted that around 95 percent of Singapore’s electricity is generated by natural gas, up from just 26 percent in 2001.
Dr. Tan said that LNG will continue to play an important role in the Republic’s energy strategy for years to come, even as it ventures into other alternative energy sources, such as solar energy.
“LNG is especially attractive to countries facing limitations in the deployment of renewable energy due to limitations in geography, size and alternative energy sources,” he said.
Singapore has also been strengthening its value proposition as an LNG trading hub, developing its LNG infrastructure and supporting commercial developments, Dr. Tan said.
More than 50 companies with a commercial or commercial development LNG presence are located in Singapore, choosing to be here due to the country’s rich ecosystem of players in the LNG value chain, close links to the region, and ease of doing business added.
Dr. Tan said: “We can expect our total onshore LNG transaction volume to continue to grow as we work with our partners and industry companies to expand their LNG presence locally and globally.”
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