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Singapore's new liquefied natural gas (LNG) facility is expected to be launched in the first quarter of 2013 with spare capacity at the terminal to be used for bunkering ships.

The new Jurong Island terminal will initially have two storage tanks when it comes into operation next year and, by 2014, it will be able to handle 6 million tonnes per year (tpy) of gas imports when a third tank is added. In total, the complex can accommodate up to 7 tanks with a total capacity of 15 million tpy.

According to Chee Hong Tat, Chief Executive of Energy Market Authority (EMA) - a statutory board under the Singapore's Ministry of Trade and Industry of Singapore - the government is also considering building a second LNG import facility in the long term to cope with the expected need to import more LNG.

At present, Singapore depends on natural gas for around 80 percent of its power generation needs, with the bulk being sourced from Malaysia and Indonesia - the world's second and largest exporters of LNG last year - under long-term contracts.

Chee said that Singapore currently buys almost 7 million tpy of piped gas from its two neighbours. However, with rising domestic demand in Malaysia and Indonesia in addition to dwindling output from ageing fields, both countries are looking at imports to meet demand in some areas.

Commenting on the issue, Chee is quoted as saying at a recent energy conference: "Supply will come under pressure because of growing domestic gas demand in Malaysia and Indonesia. What we will do is ensure sufficient capacity to import LNG to meet all of our gas demand."

Chee said that the Asian city-state will be able to handle sufficient imports of LNG to cover all of the country's power needs, even if piped gas supply contracts with Malaysia and Indonesia are not renewed.

The new terminal on Jurong Island will also be used to facilitate gas trading and bunkering if spare capacity remains after meeting the country's energy needs.

"How much LNG we need to meet domestic demand will determine how much we can support ancillary services like storage, trading and bunkering," said Chee.

The UK's BG Group is reported to have already filled orders for almost 90 percent of its exclusive 3 million tpy franchise to import LNG through the terminal, less than three years into its 20-year deal.

The government is said to be studying options for procuring additional volumes of the gas after BG Group fulfills its 3 million tpy franchise.