UK-based BG Group is joining in the rush on Singapore as the company moves to relocate its global oil and gas-trading headquarters to the Asia's largest emerging hub.
BG's decision is based on its desire to be closer to some of its key business, including a 2008 contract to supply 3 million tons of liquefied national gas (LNG) annually for 10 years to Singapore beginning in 2013.
"By moving the center of our global LNG and oil marketing business to Singapore, the heart of the fastest growing LNG region, we are closer to many more of our existing customers and are better positioned to develop new and deeper relationships in the region," Steve Hill, president for marketing oil and liquefied natural gas worldwide said in a statement.
Singapore is a fast-growing trading hub, with other major players such as Royal Dutch Shell, relocating their global headquarters in recent months and years.
Some 25 foreign LNG companies have set up trading operations in Singapore during the past six years as demand for natural gas in Asia skyrockets, with Japan and South Korea the top buyers.
Singapore opened its first LNG terminal on Jurong Island last year and is considering a second terminal on the city's eastern side. The terminal cost around $1.4 billion to build.
The country has the only LNG terminal in Asia that can reload cargoes from storage, allowing traders to store gas during low-consumption periods before selling them during peak demand seasons. It is Southeast Asia's largest receiving facility.
"Singapore will become a LNG trading hub within the next five to 10 years," Seah Moon Ming, chairman of government trade promotion agency IE Singapore, was quoted as saying last week.
Asia accounts for 46% of global gas trade, according to the International Energy Agency (IEA), which cited Singapore as best-situated for LNG trading. Of the total of global LNG consumption last year alone, Asia accounted for 75%, according to the International Group of Liquefied Natural Gas Importers show.
By James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also… More