SINGAPORE Trends and Developments Contributed by: Priyank Srivastava, Shelton M. Vaughan, Ramiro Rodriguez and Colette Tan, Duane Morris & Selvam LLP
being built. This new terminal is expected to be com- pleted by this decade and will have five million tonnes per annum of throughput capacity. This will grow Sin- gapore’s LNG import capacity by 50% to a total of 15 million tonnes per annum, which will significantly raise Singapore’s ability to respond to demand spikes and supply disruptions. Singapore is also building a new LNG truck loading facility to allow LNG supplies to reach industrial users that are not directly connected to its town gas net- work. This new facility is expected to be completed by the end of 2026. We expect the new LNG terminal and truck loading facility to be further supported by the development of more small-scale infrastructure such as bunkering vessels and digital platforms. As LNG bunkering demand in Singapore is anticipated to exceed two to three million tonnes per annum by 2034, Singapore has also been studying the need for additional LNG bunkering infrastructure to meet this increase in demand. The above will further cement Singapore’s position as a leading trading hub for LNG. This is likely to attract investments from foreign investors seeking exposure to the LNG market in Asia-Pacific. Additionally, as Sin- gapore expands its LNG capabilities, we expect to see more joint ventures and collaborations between com- panies in the energy, industrial, maritime and transport sectors for LNG projects. We also expect companies seeking to enhance their energy facilities to participate in bolt-on acquisitions for assets such as LNG stor- age facilities. Geopolitical Impact on the Energy Sector The energy sector in Singapore is deeply influenced by geopolitical factors, given the region’s strategic location and dependence on global energy supply chains. Singapore imports nearly all its energy as it has no domestic oil, gas or coal reserves. Trade ten- sions, regional conflicts, and shifting alliances impact commodity prices, supply security, and regulatory landscapes. Recent geopolitical developments have underscored the importance of supply chain resilience and diversi- fication. For example, in response to Russia’s invasion of Ukraine, the USA, UK and EU, amongst other coun-
tries, have imposed sanctions and controls on energy imports from Russia such as price caps on the sale of Russian oil, blanket bans on certain types of energy imports from Russia, and sanctions against vessels shipping Russian oil. Trade restrictions show no sign of easing as the war continues. This has pushed buy- ers to turn to alternative sources of oil such as Africa, the Middle East, and the USA. Singapore’s energy players are increasingly adopting risk mitigation strategies, including diversified sourc- ing and closer engagement with regional partners. Singapore companies have entered into arrangements and transactions with partners in countries including Cambodia, Vietnam and India to explore the import of renewable energy from various countries in the ASEAN region. Singapore’s ability to collaborate with its counterparts in the region reinforces its status as a neutral, trusted trading hub and partner where energy flows can be efficiently managed amidst global uncer- tainty. Guided by Singapore’s strong compliance and regula- tory culture, due diligence processes are also being revised to mitigate exposure to sanctioned jurisdic- tions. In M&A transactions, sanctions have necessitat- ed enhanced due diligence on targets with exposure to sanctioned jurisdictions. Such exposure may cause valuations to be marked down due to anticipated restrictions on monetisation or resale, or additional compliance costs anticipated. The volatile geopolitical environment has also invited enhanced regulatory oversight of energy and infra- structure transactions. In response to challenges such as military conflicts that have disrupted energy sup- plies, a new Significant Investments Review Act 2024, which came into force in March 2024, requires enti- ties deemed critical to Singapore’s national security interests, including energy companies such as Shell and Sembcorp, to notify or seek approval from the authorities for ownership and control changes, as well as for the appointment of key positions such as the chief executive officer, directors and chairperson of the board. Increased regulatory oversight may deter companies from participating in transactions with foreign government-linked counterparts and length-
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