SUPPLY OF NATURAL GAS FROM INDONESIA

SUPPLY OF NATURAL GAS FROM INDONESIA: 2.

Er Lee Bee Wah asked the Minister for Trade and Industry (a) how dependent is Singapore on the supply of natural gas from Indonesia; and (b) what will be the impact on our economy if the supply is abruptly disrupted.

Mr Iswaran (for the Minister for Trade and Industry): Mr Speaker, Sir, about 80% of Singapore's electricity is generated by gas turbines, fuelled by natural gas, the remainder is generated by steam plants using fuel oil as well as from burning of refuse in our waste incineration plants. Presently, 75% of our natural gas supply is piped from Indonesia while 25% is piped from Malaysia. I would like to assure the Member that we have the capacity to deal with any short-term disruption in the supply of natural gas. Our power generation companies are required to stockpile at least 90 days of fuel reserves. If our natural gas supply is disrupted for any reason, our gas turbines can continue to operate by switching to diesel. The generation companies can also burn fuel oil to generate electricity using steam plants.

Over the medium to long term, our energy security will depend on our ability to diversify our energy sources. That is the first step. We will import liquefied natural gas to supplement our piped natural gas. We are building our first energy terminal, which is targeted to be operational in 2012 and we have just recently appointed BG Asia Pacific as Singapore's LNG aggregator, to import LNG from various parts of the world. With the advancement of new technologies, we are also not writing off other energy options in order to further diversify our energy sources.

Er Lee Bee Wah (Ang Mo Kio): Should there be any disruption, long term, beyond 90 days, are we able to cope with it?

Mr Iswaran: Mr Speaker, Sir, the 90-day reserve is, as I have said earlier, a kind of a short-term plan and it will help us to manage any intermediate disruption. If we talk about a prolonged disruption in gas supply, then clearly our steam plants and our combined cycle plants, which can switch to diesel, will be our mainstay, so we continue to operate these plants using alternative fuels to sustain our electricity needs. But more important than that is our broader effort to diversify our energy sources. So energy is the key element in that, it is the key plank of our energy diversification strategy for the long term. What that means is beyond piped natural gas, we are able to get natural gas in a liquefied form from different parts of the world beyond our immediate geography. And beyond that, we have also kept the option open for other forms of fuel as part of Singapore's long term energy strategy.