(Bloomberg) -- Singapore will see a short-term increase in liquefied natural gas demand, due in part to the AI boom that’s driving data center 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. Chief Executive Officer 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 centers and artificial intelligence is starting to outstrip available power supply in some parts of the world. Tech giants like Amazon Inc. and Microsoft Corp. are pledging to invest billions of dollars in data centers in Southeast Asia. Singapore’s government is aiming to increase the amount of power it allocates for data centers by as much as 35%.
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 decarbonize 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 neighbors, and has a goal to bring in 6 gigawatts by 2035, which would be around half of overall demand.
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.”
--With assistance from Stephen Stapczynski.
(Updates with details on nation’s plans to add more power for data centers in third paragraph.)
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