Singapore's Pavilion inks first long-term LNG deal with Qatar
9 November 2020

Singapore’s Pavilion Energy said on Monday it inked a deal with Qatar Petroleum’s trading unit to buy up to 1.8 million tonnes per year of liquefied natural gas (LNG) for 10 years from 2023.

Each cargo delivered to Singapore under this agreement will come with a statement of greenhouse gas emissions from wellhead to discharge port, Pavilion Energy said in a statement.

Pavilion Energy, owned by Singapore state-owned investment company Temasek Holdings, signed the deal with Qatar Petroleum Trading, a subsidiary of Qatar Petroleum.

Qatar, which plans to increase its LNG production to 126 million tonnes a year by 2027 from 77 million currently, has been trying to secure buyers for the extra volumes.

When issuing a buy tender for LNG earlier this year, Pavilion had asked potential suppliers to outline their carbon mitigation efforts because it aims to eventually make its purchases carbon neutral.

Leading industry traders and consumers have been seeking more transparency on carbon and methane emissions in the gas value chain amid a global decarbonisation push.

While LNG is generally considered a cleaner fuel than coal or oil, there is no accepted standard for measuring the emissions from producing and transporting the fuel, which needs to be cooled to minus 162 degrees Celsius (minus 260 degrees Fahrenheit).

Singapore is also trying to diversify its gas imports as its long-term piped-gas contracts with neighbouring Indonesia start expiring from 2023.

The deal means that Qatar, the world’s largest LNG producer, will become a significant energy supplier to Singapore.

In September, Qatar signed a 10-year deal with China’s Sinopec to supply LNG at prices linked to Brent crude oil values.

Last year, Qatar commissioned a carbon capture and storage plant to remove 5 million tonnes of carbon from its LNG facilities by 2025.