Despite having no natural gas deposits of its own, Singapore is emerging as one of the world’s leading Liquefied Natural Gas (LNG) trading hubs. Using its world-class infrastructure, large financial services industry, and superior talent, the small city-state is now a major global player. Make no mistake, with Asia accounting for some 71 percent of the world’s 236 million tons of LNG trading, the market is huge.
Singapore’s LGN terminal may be expanded
The Singaporean government is now home to Asia’s first LNG terminal, a world-class facility capable of handling trade from across the globe. The LNG terminal allows companies to ship and store LNG. Such terminals also allow companies to convert liquefied natural gas back into gas. Currently, Singapore’s LNG terminal is designed to handle some 3.5 million metric tons of gas, but the facility could be expanded to as many as 6 million metric tons.
Unlike other facilities, Singapore’s LNG facility lets no gas go to waste
This new facility is already being widely lauded by industry experts. In typical Singaporean style, it marks a high-water in efficiency. For example, when storing natural gas, a portion of it will inevitably boil off, usually resulting in losses for traders. The Singaporean facility, however, captures this boil off and then allows it to be sold to local customers. This ensures that traders are extracting the full value of their product, instead of letting some of it go to waste.
Natural gas on its way to being more important than oil
Natural gas can be used for many different purposes. Natural gas is a vital source of electricity production, providing some 24 percent of America’s electricity, for example. It is generally seen as a cleaner fossil fuel than coal, as it produces far less pollutants and significantly less carbon emissions. Natural gas is also used to produce fertilizers, fuel energy-efficient transportation vehicles, and numerous other things. With so many different applications, the fossil fuel is now starting to rival oil in importance.
With Singapore facing increasing competition in advanced manufacturing, long the backbone of the domestic economy, the government has been working to develop other opportunities. The LNG terminal is part of a broader push to develop Singapore as a leading commodities trading hub. Already, the city-state supports a large petroleum refining industry that accounts for 5 percent of the GDP, and numerous other commodity trading markets.
For example, Singapore slashed taxes on gold last year, helping to drive a push to convert the country into a leading gold trading hub. The country has also built a high-security mega-vault at its airport that will allow companies and individuals to safely store large quantities of gold, diamonds, and other precious commodities. Such efforts are helping to reinforce Singapore’s position as a global trading hub for various products, services, and commodities.
Singapore is arguably the richest country in the world
Throughout history, the Singaporean government has proven to be very effective at developing large scale industries. Once a poor back-water hub, Singapore has emerged as arguably the richest country in the world, mile-per-mile. They city-state has successfully developed several advanced industries on a large scale, including financial services, high-end manufacturing, chemical production, shipping, and construction.
In all likelihood, Singapore will be able to establish itself as a world leader in LNG trading. This will continue to fill the Singaporean government’s rich coffers and create numerous high-end jobs. As Asia continues to develop, natural gas consumption will likely rise. As such, Singapore should be able to grow its LNG industry to meet demand.