Singapore gas liberalisation planned for early 2003

31 October 2002 – The delayed liberalisation of Singapore’s natural gas market should be completed by early 2003, according to an executive with state utility Singapore Power Ltd.

Singapore is separating its gas transport, import, trading and retail operations to create a competitive and tradeable market.

The changes were originally to be completed by July last year, however, delays in the liberalisation of the country’s power industry, which is the major natural gas end-user, have contributed to delays in the gas industry, said Wong Toon Suan, who oversees the gas operations of state utility Singapore Power.

“I think we will see it by January, or at least the first quarter,” Wong said of the gas market liberalisation.

Wong, speaking on the sidelines of the PetroMin Gas Pipeline Conference, said the network code, or the terms of access and usage of the gas transport system, must first be completed before the process can be completed.

Conversion of the island-state’s consumer market and distribution system to natural gas from town gas will occur about one year after liberalisation, Wong said.

Town gas, produced from the petroleum product naphtha, is more expensive and contains one-half the heating value of natural gas, he said.

Wong said the switch to natural gas for home appliance use will begin in early 2004, and will take four to five years and S$70-90 million ($40-50 million) to complete.

“Consumers should enjoy lower prices once that is done. Retail prices should drop easily by 15 to 20 percent,” he said.

Singapore’s gas industry plans also include importing liquefied natural gas (LNG) to boost Singapore’s role as an industry hub and offer greater supply security.

While plans to import LNG are still in their early stages, Wong said studies by Singapore Power found that LNG would cost 15 to 20 per cent more than piped gas.

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