LIQUEFIED NATURAL GAS VALUE CHAIN A SINGAPORE PERSPECTIVE

Abstract

In this Academic exercise, we seek to understand the current LNG value chain, assess the value of the LNG infrastructure that is currently being built in Singapore and aim to realize any profit potential of the infrastructure. The study built on the knowledge of the existing global LNG industry characteristics and market function. It has been observed that despite an increasing flexibility in the market that results in the emergence of spot market, the LNG value chain in Asia remains rigid. We examined the Singapore energy market and it was found that energy security was the underlying reason for the development of the LNG terminal. The development faces positive uptake of LNG within the country’s market players and the introduction of LNG has transformed the market environment in terms of various laws enacted and new industry players. A model was then designed to develop the Singapore regasification terminal as a Hub to meet Asia’s spot demand so as to further capitalize the Singapore LNG infrastructure as well as to increase the flexibility in the value chain. Theoretically, a hub is highly efficient due to a myriad of reasons. This thesis provided an empirical study on the model and actual trade data were used to provide a realistic estimate of the benefit that the Singapore Hub will bring to the value chain.