Singapore will see a short-term increase in liquefied natural gas demand because of the AI boom that’s driving data centre growth, according to the country’s state-owned importer of the fuel.
The digital world “is a huge call on energy”, said Singapore LNG Corp CEO Leong Wei Hung. The surge in demand is a “boon for energy”, but there’s also a flip side “in the sense that you can’t build infrastructure fast enough”, he said in an interview late Thursday.
The boom in data centres and artificial intelligence is starting to outstrip available power supply in some parts of the world. Tech giants like Amazon and Microsoft are pledging to invest billions of dollars in data centres in Southeast Asia.
Singapore LNG was formed in 2009 by the country’s Energy Market Authority to develop and operate the city-state’s only LNG import terminal. A second terminal “to meet the expected demand”, is set to come online by the end of the decade, Leong said.
The jump in electricity consumption will make it tougher for Singapore to decarbonise its grid. It relies on imported gas for around 95% of its electricity, but its options to develop renewables are constrained by a lack of space.
Instead, the city-state is aiming to import green power from its neighbours, and has a goal to bring in 6 gigawatts by 2035, which would be around half of overall demand.
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Leong said he was optimistic that LNG would have a continued role to play in Singapore as the world moved toward cleaner sources of energy.
“The world must go toward renewables, but the cost of renewables is still very high,” he said. “While we wait for renewables to be reasonably priced, LNG has to be the solution.”
