Singapore energy regulator invites proposals for two new LNG import licenses

Singapore — Singapore's electricity regulator Energy Market Authority has issued a request for proposal or RFP for the appointment of two new LNG importers into the city-state to boost competition in the domestic market, according to the proposal document dated July 9.

EMA said the two new licenses to sell regasified LNG in Singapore will be on a "non-exclusive basis" in addition to the two existing importers Pavilion Energy Singapore and Shell Eastern Trading which were appointed under a similar proposal issued in 2014.

Pavilion Energy and Shell Eastern have gas sales agreements with a duration of at least one year and their exclusive franchise ends when both the companies either secure term supply of 1 million mt/year of regasified LNG or until April 2021, whichever is earlier, EMA said.

Their exclusive franchise is coming to an end.

The new proposal is not a tender for LNG supply or LNG sales to EMA or any other user in Singapore and the importer will be responsible for signing any new contracts with buyers in Singapore for the sale of regasified LNG, according to the document.

Each importer must be incorporated in Singapore and will have to sign a terminal use agreement or TUA with Singapore LNG Corp., it said. The "importer's primary function must be to provide regasified LNG supply that is secure, reliable and price competitive to fulfill Singapore's domestic demand," it added.

The importer will be allowed to sell short-term or spot regasified LNG under contracts of less than a year, sell LNG for bunkering and provide LNG cargo loading and unloading services at the Singapore LNG terminal.

The deadline for proposals is Nov. 9 and the results are expected to be announced by end-March 2021.

The selection criteria will include the prices offered to end users, with an initial 5-year period up to Dec. 31, 2025, favorable take or pay clauses, mechanisms to allow flexibility to deviate offtake, mechanisms to ensure price competitiveness, diversity of supply sources and diversity of price indexation, according to the proposal.