Under the LNG Storage & Reload agreement, the first LNG cargo was delivered to Pavilion Gas at the SLNG Terminal on Wednesday by Mobil Australia Resources from ExxonMobil's Gorgon LNG project in Western Australia. PHOTO: PAVILION ENERGY
PAVILION Gas, a wholly owned subsidiary of Pavilion Energy, has secured access rights to the liquefied natural gas (LNG) terminal on Jurong Island.
This, it said, will support higher volumes of LNG trading activities, small scale LNG opportunities, LNG breakbulk and vessel cool-down services.
The group, which is owned by Temasek Holdings, is also hoping that having the extra feather in the cap will help it in its push for greater adoption of the Singapore LNG index.
"Pavilion Gas will work with industry players to trade LNG indexed to the Sling (SGX LNG Index Group) to support more trades based on the index," it said in a press release on Thursday.
Pavilion Gas manages downstream natural gas operations for both piped natural gas and LNG in Singapore. The firm also markets, trades and distributes natural gas in Singapore and the region.
Under the agreement, Pavilion Gas will have access rights to 160,000 cubic metres of tank capacity on a segregated basis at the terminal for 24 months. The agreement follows a Request-for-Proposals process that Singapore LNG Corporation (SLNG) started in February this year, ahead of the end of its agreement with Trafigura.
Trafigura had in June 2015 signed a similar agreement with SLNG to use excess capacity at the terminal. The Business Times understands that a key difference in how Pavilion Energy hopes to use the terminal, as compared to Trafigura, is to allow for multi-user access of the terminal - or subletting of terminal space - in order for Singapore to grow further as a LNG hub.
Seah Moon Ming, chief executive of Pavilion Gas and Pavilion Energy, said the firm is delighted to partner SLNG on LNG storage and reload services at the terminal.
"With increased spot trading volume, this will strengthen Singapore's position as an Asian LNG hub," he said. "We will work closely with SLNG to facilitate multi-user access of the SLNG Terminal for LNG trading activities. Pavilion Gas is well-positioned to expand and grow its LNG trading presence regionally and globally."
SLNG chief executive John Ng said that it will work closely with Pavilion Gas to further Singapore's ambition to become a regional LNG hub.
The terminal in April launched its truck loading facility, deemed the first step towards developing a LNG trucking business in Singapore. The facility allows small quantities of LNG to be transported overland to any location where it is needed, such as to industrial plants that are not connected to the gas pipeline network.
SLNG will add a fourth storage tank at the terminal by next year. This will bring the terminal's total storage capacity to 800,000 cubic metres, and increase its send-out capacity from the current 6 million tonnes a year to 11 million tonnes, in excess of Singapore's domestic requirements.
The agreement is a good move for both companies, said Edi Saputra, senior research analyst for Asia gas and power at Wood Mackenzie.
Having access to SLNG's terminal is an absolute requirement given its licence to supply one million mtpa (metric tonnes per annum) of LNG under the second aggregator scheme, he said.
The access will also allow Pavilion to manage its gas supply portfolio - comprising piped gas supply from Indonesia and LNG imports from the international market - in a more optimal way, he added.
For SLNG, the upcoming expansion in capacity means it will have 8 million mtpa of spare capacity from 2018. "Any additional customers will be more than welcome," said Mr Saputra. "The recent agreement with Pavilion makes much sense, and more of this will be required."