Eyewitness Tay Cheng Wei, who recorded this video, said the teens were playing with firecrackers and that caused the fire.
The fire was started when the teens, all males aged between 14 and 20, were playing at Punggol Waterway, near Waterway Primary School.
SCDF says the blaze measured the size of two basketball courts.
It took 20 firefighters half and hour to get it under control, and another hour to fully extinguish it.
Police were first alerted to the fire at about 10.49pm.
The incident has been classified as Mischief by Fire and investigations are now taking place.