Singapore is building a 6 million tons per year (tpy) regasification facility primarily to meet growing domestic demand for power, but also as a platform to facilitate spot trading as more LNG traders set up operations in the city-state. 

"The spot market for LNG now account for 20 percent of world trade, up from 10 percent," said Neil McGregor, CEO of Singapore LNG in an interview with Reuters at Singapore International Energy Week. "One positive development for spot trading is that there are increasing amounts of divertable LNG, where there was none previously." 

This development will help ease concerns that tighter supplies expected over the next few years due to strong Asian demand may dampen spot market trading, he said, as most consumers try to lock in supplies through long-term deals. 

In the longer term, rising shale gas exports from the United States could also add to supplies for trading, he added. 

Last week, BG Group became the first company to seal a US LNG export deal when it signed a 20-year agreement to source gas from Cheniere Energy's upcoming LNG export terminal at Sabine Pass in Louisiana.

The Singapore terminal, being built on Jurong Island, is 60 percent complete, with two tanks due to be operational by the second quarter of 2013, said McGregor. A third tank will be completed a year later. 

The Singapore government is prepared to build more tanks if needed for spot trading as power utilities seek to boost output by using the fuel to meet local demand, said S Iswaran, second minister for trade and industry, in an interview with Reuters earlier this week.

In the longer term, the terminal could be used to supply LNG as a marine fuel, McGregor said. 

"We think it has good prospects to eventuate in the 5 to 10 year horizon, but any utilization of the LNG Terminal to support this activity will have to be commercially justified," he said.