SINGAPORE - Singaporean State gas buyer GasCo launched its first procurement exercise to secure term supplies of liquefied natural gas (LNG), said Gan Siow Huang, the country's Minister of State for Energy, Trade and Industry.

The city-state, which relies on natural gas to generate about 95% of its electricity, is also studying the feasibility of a third LNG import terminal on the northeastern island of Pulau Tekong, Gan said at the Asia Gas Markets conference on Tuesday.

The moves come as Singapore prepares to expand its gas-fired power generation capacity. On Monday, the government said it would add five new gas-fired power plants to raise its electricity generation capacity by around 26% early next decade from around 12 GW at present.

Gan did not provide additional details on GasCo's procurement exercise or the size of the potential third import terminal. The company is on track to award its first contracts by 2027, Tan See Leng, Minister for Energy, Trade and Industry, said on Monday at the Singapore International Energy Week conference.

GasCo, which was established in 2025 to centralise Singapore's gas procurement and supply, previously said it would seek long-term LNG supplies in the first quarter of this year for delivery from 2028 onward, moving to secure multi-year contracted volumes rather than relying on one-off spot purchases.

"There will be long-term contracts to underpin what we have to do. And then you have to pay for flexibilities... We will rely on spot (purchases) to build that," said GasCo CE Alan Heng during a panel session at the Asia Gas Markets conference.

He added that GasCo would seek some volume flexibility and cargo diversion permission in its contracts.

REGIONAL LNG NEED

Singapore is expected to face a gas supply gap of about 3-million metric tons in 2028 and 2029, which is expected to widen to around 6-million tons by 2035.

While GasCo's priority is to ensure supply to Singapore, Heng said it also made sense to work with its Association of Southeast Asian Nations (ASEAN) neighbours to buy LNG, as the countries will all eventually become LNG importers.

"So is there an opportunity for us to work (together) ... so that as an ASEAN region, we might look after each other's interests? And then, because we're all not significantly big, at least we can come together and find opportunities to limit our costs," he said.

"I would suggest that Southeast Asia as a destination should really be standard, as opposed to a country destination."

Singapore imports LNG as well as piped gas from neighbouring Malaysia and Indonesia. Indonesia's upstream oil and gas regulator on Saturday said it had cut pipeline gas exports to Singapore by 31-million standard cubic feet per day to divert supply to its own power sector.

Earlier this year, Singapore started construction of its second LNG import terminal with a regasification capacity of 5-million tons per annum (mtpa). The project, scheduled to begin operations by 2030, will raise Singapore's total regasification capacity to 15-million tons a year.

Separately, Singapore appointed Keppel Energy, Sembcorp Utilities and Tuas Power to test the commercial viability of importing and using biomethane for power generation and industrial decarbonisation, Gan said.