Delayed: LNG terminal in Singapore
Singapore delays LNG terminal plan
The Singapore government will take over development of its first $1 billion liquefied natural gas terminal from a consortium, to avoid more delays due to the credit crunch, and defer its completion by a year to 2013.
The PowerGas-led consortium, which included GDF Suez with a 30% stake, had been due to make its final investment decision this month for the project slated to have a 3 million-tonne annual capacity when completed in 2012.
"Financial markets are also less hospitable and financing is more difficult and costly. It has, therefore, become significantly more challenging for PowerGas to proceed with this project on a commercial basis as originally intended," Reuters quoted Senior Minister of State for Trade & Industry S Iswaran telling an LNG conference.
"The government has decided to take over the ownership and development of the LNG terminal in Singapore," he said.
GDF Suez confirmed the consortium had dropped the project but declined to comment further.
The Energy Market Authority will form the Singapore LNG Corporation for this purpose, and "the aim is to ensure that the terminal is completed and operational by 2013, notwithstanding the present uncertainties in the market", Iswaran said.
Industry sources confirmed the PowerGas-led consortium had slowed down the project due to the downturn.
"It was not the right time to move on with it," an industry source said.
"The government saw this project as a priority one and decided to go ahead with it despite the profitability issues," he said adding the decision was not a surprise.
The LNG terminal is the latest Singapore project to be delayed due to the financial crisis.