John Ng, President, Liquid Natural Gas (SLNG), Singapore
Central to the city’s ambitions to become an LNG trading hub, Mr Ng describes the extant facilities and the organisation’s ambitions for expansion. All this ambition, however, is served by a customer based focus as Mr Ng attests.
You became CEO-designate of SLNG in December last year. What were the first tasks you were assigned, and how have you brought your own management style to the position?
I am a very practical individual. When I joined SNLG, the business had been operational for around five months and as a CEO my strength is in maintaining high working standards. I have implemented a few things to achieve this, firstly seeking operational excellence and looking to ensure the terminal was operating to best serve its potential customers. Knowing the terminals importance with regard to Singapore’s energy security and reliability made this a particular focus. The second development I took forward was to create a vision for the expansion of the terminal. At the time I joined, the terminal was on the cusp of completing phase 1b of the terminal development which saw the capacity of the re-gassing equipment increased from three to six million tonnes and to finish the building of the second jetty on site. This was finished in March 2014.
Now, the next target is to move to a capacity of 1.5 million cubic meters. This objective must align with the timing and demand for LNG. At the moment, the call for contractors to conduct phase 3 of the terminal project has been made. This should be finished by 2013.
Thirdly, in the area of maximising asset use, whilst currently the assets have a capacity of six million tonnes the demand is currently around three million tonnes- meaning that the terminal has the opportunity to be more extensively utilised. It is important for us to continue to maximise the value of the assets we retain. This can be achieved through efficient use of the cool down systems and other initiatives.
Finally, the company must ensure that clients and stakeholders are best served. This means not only external clients, but also the internal ones, making SLNG a better place to work. These have been my priorities since starting.
In terms of the international LNG market, what intrinsic qualities does Singapore have which will keep it central to the LNG trade in this area?
Singapore needs LNG, as it is an important component of our fuel and energy supplies in the city. It is essential for the city to address this need efficiently and effectively and this is why the terminal needs to embrace those concepts in its design. LNG must be brought into Singapore in the most competitive manner possible. There is currently one aggregator in the system, BG Singapore Gas, but there is the possibility further aggregators will be brought into the system in order to increase competition.
When selling LNG as a terminal operator, we need to encourage as many suppliers as possible into Singapore. To facilitate this, SLNG must promote a more liquid business market and this is a reason to open up around ten percent of the Singaporean supply of gas to the spot market in the future.
An environment must be created which engenders that liquidity- which in turn will reduce prices to consumers. As international gas traders are setting up in Singapore now, the market network is building and growing stronger which is adding further to liquidity in the market here, simultaneously adding to Singapore’s strength as a hub. SLNG’s role is to facilitate this.
There is even talk of a second terminal to be constructed in the east of the island. How important is the speed of progress in establishing the terminal infrastructure to secure Singapore’s position as an LNG hub?
The second terminal was announced by the prime minister in February. SLNG would hope to be part of that equation. From an SLNG perspective this is good and represents an important development. The company welcomes this plan for expansion which will increase security and reliability to the supply of LNG in establishing a bigger working environment for the LNG hub to develop.
How is SLNG balancing the local needs of consumers with those of the traders?
At the moment, the LNG hub is still in its infancy so the most important role for SLNG is ensuring our operations satisfactorily meet all the requirements of customers here in Singapore. However, we are looking to encourage international clients through LNG cool-down facilities, storage and reloading services.
The latter activity is still a secondary one, but we are eager to develop it.
What are the prospects for break-bulk shipments providing LNG re-fuelling facilities to compliment Singapore’s already notable strength in ship bunkering?
If one starts looking at the bunkering perspective, in order for LNG bunkering to take place it must have its own network of companies in place. First of all, a ship owner must be willing to convert a vessel to run on LNG. Secondly, the cost of fuel must be appropriate, as any ship owner’s main cost is fuel at the moment. The current cost disparity between LNG and bunker fuel must tighten before it is likely that LNG bunkering will become a fully viable option. Simply, it depends on the cost and availability of LNG fuel in a port.
Often the regulator can be responsible for ensuring whether a LNG bunkering option is feasible in any given port. Should ship owners convert their vessels it is then becomes the responsibility of the port authorities to forward this as a cost-effective option.
Singapore is well placed to be the site of a LNG bunkering point as it is already in the centre of an existing trade route and has authorities renowned for their pro-business attitude.
How flexible are your current infrastructure arrangements?
There are a few elements already in place, and we have intentions to add further facilities to reinforce this flexibility. At the moment, the port includes two large jetties. They are configured, designed and tested for storage and reloading of LNG meaning if customers wish to bring their cargo into the terminal, we can quickly unload their cargo into our holding tanks, and reload rapidly. The jetties are able to operate simultaneously by having ships unload or load at the same time.
The second flexible element is ship-to-ship transfer from one jetty to another.
Moving forwards, SLNG is seeking to offer facilities where rich gas can be converted to lean gas using nitrogen. This allows the sourcing of gas from a greater geographic area.
Breaking down the LNG transport will add to the variety of roles LNG can be used for. LNG trucking will further Singapore’s abilities to take on LNG bunkering services.
Construction of a tertiary jetty has commenced, though the topsides are not complete as yet. Once the LNG bunkering is happening on a significant scale the third jetty will be a useful tool to serve customers.
Looking to the future, what do you think the impacts of this new infrastructure will be on the regional LNG market, and indeed further afield?
One cannot predict the market- it will follow trends according to cost, price and incentive. The terminal is, however, designed to be future proof. It is scalable and flexible.
When the terminal was built, its capacity to offer gas cooling services was relatively unknown. As it has become more widely understood by the industry that this facility exists, uptake of this service has increased and this form of operation has been run 6 times now. We did not create the market, but actualise a solution to a need that was already there.
The tanks are available to be used on a short term basis for loading and re-loading. This has encouraged traders to store their operational supply for resale in tanks, or to store gas when it is cheap till the price rises. In creating opportunities for traders, suppliers SLNG has started to multiply the uses and frequency with which these services are sought after.
SLNG is an enabler, not a creator.