South Korean builder Samsung C&T Corp (000830.KS) won the contract for engineering, procurement and construction (EPC) of Singapore's first liquefied natural gas terminal, Singapore LNG Corp Pte Ltd (SLNG) said on Monday.
The $1.05 billion project will be ready by early 2013 after a delay due to the financial crisis when the original consortium dropped out, and would enable Singapore to position itself as an LNG hub, lowering its dependence on imported gas from neighbours to feed growing demand.
The terminal will have an initial capacity of 3.5 million tonnes per year (tpy), slightly above past projections of 3.0 million, with provisions to expand it to 6.0 million or more if needed, said Neil McGregor, executive director of SNLG.
"There were a total of five (final) bidders for the EPC contract. These are all seasoned LNG players," he said, without indicating the exact value of the engineering contract, but added it would be below $1 billion. Foster Wheeler (FWLT.O) will be the project management consultant, he told a news conference.
Asked if SLNG has any plans to also use LNG from the terminal for re-export, McGregor said:
"We do not have any contracts for re-export yet. We need to establish contacts with the LNG traders, but at least this is the first step (towards that)."
Construction of the terminal on reclaimed land on the city-state's oil and petrochemical hub Jurong Island, will start in about six months, an executive from Samsung C&T said.
The completion of the LNG import terminal project is on track for early 2013, after it was deferred by a year, McGregor added.
Lawrence Wong, Energy Market Authority (EMA) chief executive said about 80 percent of Singapore's power is generated by natural gas imported via pipeline from Indonesia and Malaysia, and the supply of gas chilled to liquid form for sea transport would help meet incremental demand.
"Singapore's total piped gas (capacity) is currently about 6 million tonnes per annum. The piped gas will continue to run, as we cannot suddenly switch to LNG," Wong said.
"There are still contracts to meet, but the LNG supplies will help meet new demand."
The EMA said in 2008 that BG Group Plc (BG.L) had won a 20-year exclusive contract to supply the Singapore LNG terminal, offering the British gas producer a strong position in the Pacific basin.
The Singapore government said last June it was taking over development of the terminal to avoid more delays due to the credit crunch. The EMA formed SLNG to take over the project from a PowerGas-led consortium, which included GDF Suez
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