Speech by Mr Raymond Lim, Minister of State for Foreign Affairs & Trade and Industry, at the ground breaking ceremony for commencement of works on Sakra Natural Gas station at 10.45 am on Wed, 17 July 2002 at Sakra, Jurong Island

Mr Timothy Chia,
RADM (Ret) Kwek Siew Jin,
Distinguished Guests,

Ladies and Gentlemen

It is both a pleasure and an honour to officiate at this Ground Breaking Ceremony. My heartiest congratulations to PowerGas for the commencement of works on this natural gas receiving and metering station at Sakra.

PowerGas' Investment in Singapore’s Gas Infrastructure
This natural gas station may not be the first in Singapore, but it is nonetheless an important part of the new infrastructure that PowerGas has invested in to ensure greater reliability, quality and efficiency of the gas transportation system. Here the imported gas from South Sumatra will be metered and analysed to confirm compliance with specifications, filtered, and pressure regulated, and finally injected into Singapore's gas transmission network. This $22 million facility will be completed by the 2nd quarter of 2003, in time for commissioning in August 2003.

Natural Gas
Natural gas is the cleanest energy source available today. Currently, about 90% of the imported natural gas is for the generation of power. Increasingly, generation companies are employing technologies such as combined-cycle gas turbine (CCGT) technology which utilise natural gas. Almost 40% of electricity demand in Singapore is met by CCGT technology. We expect this to increase to 50% by 2004. The demand for natural gas will increase in tandem with growth in electricity consumption and alternative uses. There will be many exciting opportunities ahead for the gas industry.

How Natural Gas Can Benefit Singapore
Natural gas will benefit industries and households alike. It has the potential to enhance our industries' competitiveness, and also improve the quality of life of Singaporeans in general. Natural gas will allow our power gencos to produce electricity more cheaply. For example, in January this year, the Energy Market Authority had reduced the price cap on some of our larger gencos to reflect the contributions of the more efficient gas-fired plants. This translated into a 6% reduction in electricity prices.

Natural gas can contribute to lowering costs for companies in other ways. For instance, it can be used for district cooling. Industries and offices located in close proximity can share centralised cooling facilities, and this would be cheaper than if the buildings were to be individually cooled.

There are environmental benefits as well. We have begun to do trial runs for compressed natural gas (CNG) vehicles in our public transport fleet, such as CNG taxis and buses. If these trials prove successful, it will pave the way for green vehicles to be introduced on our roads, which will be more friendly for our environment.

Import of Natural Gas into Singapore and Bilateral Relations
I would like to commend PowerGas for their crucial role in the provision of reliable and safe gas transportation of piped gas supplies to all sectors of Singapore. I would also like to note the contribution of Development Resources Pte Ltd, a local consultant, as PowerGas' specialist engineering consultant for this Sakra Natural Gas Station project, as well as Sumitomo Metals Industries Ltd, which is the project's building contractor and has extensive experience in energy infrastructure.

I would also like to acknowledge the strong bilateral relationships that have been built up between Singapore and Indonesia over the years. Our gas deals with Indonesia will help enhance security of supply for our energy requirements and also bring economic benefit to Singapore. They are made possible by the warm relationship enjoyed by the two countries at both the governmental and the private sector levels. Resulting from these deals, jobs have been created in both countries for the construction, operation, and maintenance of these facilities. I am certain that through the course of implementing these contracts, there would be much mutual learning and co-operation. These pipelines between Singapore and Indonesia will contribute to the realisation of the TransASEAN Gas Pipeline, which will one day link up gas buyers and sellers all over ASEAN. This is a laudable project which we hope will enjoy good public-private sector partnership and be successfully completed in time.

On this happy note, it is my pleasure now to initiate the commencement of works on the Sakra Natural Gas Station.

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