Abstract:
Singapore and Saudi Aramco have reached an agreement to deal with energy supply disruptions caused by war in the Middle East and ensure the security of energy supply in Southeast Asia. Singapore will store oil from Saudi Arabia in underground caverns starting next year in response to global energy supply disruptions caused by war in the Middle East.
The oil will be stored in Jurong Rock Caverns. The facility, located on an artificial island off the southern coast of Singapore, can store up to 9 million barrels of oil.
Singapore’s Energy Minister Tan See Leng said on Monday that the agreement with Saudi Aramco aims to safeguard energy supplies in Southeast Asia and enhance Singapore’s ability to withstand global shocks.
Shilong Chen said: "We cannot predict every supply disruption, but we will always ensure that Singapore is prepared to respond. This will be our largest energy infrastructure expansion in decades."
Singapore will also add five new natural gas power plants over the next decade, increasing its power generation capacity by 26%.
As Asia's energy trading hub, Singapore is particularly vulnerable to global market turmoil. In addition, the country relies on imported natural gas to produce 95% of its electricity.
The events of last weekend highlighted Singapore's vulnerability to energy supplies. Indonesia, one of Singapore's largest natural gas suppliers, announced that it will reduce the natural gas transported to Singapore through pipelines by about 31 million cubic feet per day to meet its own needs.
On Sunday, Singapore Prime Minister Lawrence Wong said at the annual conference of the ruling People's Action Party that the government has invested in the construction of liquefied natural gas import facilities and is seriously evaluating whether to incorporate nuclear energy into Singapore's energy mix.
Talking about Indonesia's decision to cut natural gas exports, Lawrence Wong said: "We hope that all relevant parties can fulfill their commitments, and Singapore's natural gas importers will take necessary measures to safeguard their rights and interests under relevant contracts."
The oil storage agreement reached between Saudi Arabia and Singapore is one of similar arrangements that Riyadh is advancing with a number of foreign governments. The agreements are designed to allow Aramco to store oil at various locations overseas.
Since the outbreak of the US-Iraq war, the closure of the Strait of Hormuz and attacks on Saudi energy infrastructure have disrupted Saudi Arabia's global oil supply routes. Saudi Arabia has been seeking ways to protect its global supply network.
Saudi Energy Minister Prince Abdulaziz bin Salman said: "Deploying oil supply closer to the key market in Asia will enhance the flexibility of our supply network, while helping to ensure Singapore's energy supply security and improve its preparedness to deal with emergencies."
He added: "We believe that there is potential for further expansion of cooperation between the two parties."
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