South Korea’s Samsung C&T Corporation (000830.KS) has won a $200 million contract to build a third storage tank at Singapore’s upcoming liquefied natural gas (LNG) terminal, the company said on Friday.

It won the contract from Singapore LNG Corporation (SLNG), and expects to complete the project by early 2014. The additional tank will allow the terminal to handle up to 6 million tonnes per year (tpy).

 

Singapore is building a US$1.32 billion ($1.7 billion) import facility for LNG — gas chilled to its liquid form — to help meet rising demand for the fuel from the power sector and other industry users.

Samsung was also awarded the contract for the first two tanks in February last year, and has completed around 25 per cent of work on the initial project, the company said.

 

The first phase of the new facility is on track for completion in early 2013.

 

Most of the gas imported in the first phase was likely to go to local power plants and industry, but the additional capacity could be used to facilitate spot trading of LNG, said the CEO of SLNG.

 

“Our primary goal is to ensure the needs of the domestic market but the terminal can also facilitate spot trading of LNG and make Singapore the gas hub for the region,” Neil McGregor told Reuters.

 

“We’ve spoken to a range of players, from international oil companies to banks, and they have all expressed interest in using the terminal for trading.”

 

The terminal will be designed to facilitate spot trading with a range of jetties that can handle LNG cargoes from 15,000 cubic metres to up to vessels measuring 265,000 cubic metres, said McGregor.

 

BG Group (BG.L) has a 20-year deal to supply LNG into Singapore for domestic energy consumption. So far, it has found buyers for around 1.5 million tpy of gas in the power sector and was in talks with potential customers for the rest.

 

SLNG is also looking at other business opportunities, including the possibility of selling LNG as bunker fuel.

 

“Singapore is the world’s largest bunkering port. Even if we capture 5 to 10% of the market, it’s a significant market,” said McGregor.

 

Singapore sold a record 40.9 million tonnes of bunker fuel in 2010, according to government data.