Singapore gas importer to assess contract breach after Indonesia cuts supply
Minister Tan See Leng said Singapore has sufficient gas from other sources and will let Gas Supply examine contracts for any breach following Indonesia's reduction of pipeline deliveries.
Singapore's gas importer Gas Supply will review its contracts with Indonesian suppliers to determine whether a breach has occurred after Jakarta announced a cut of 31 billion British thermal units per day (BBTUD) from Oct 24. The move, described by Indonesian media as part of President Prabowo Subianto's effort to prioritise domestic energy, reduces pipeline deliveries to less than 2 percent of Singapore's total daily gas demand, according to the Energy Market Authority (EMA).
"We have sufficient replacement gas from other sources, and this includes liquefied natural gas," Minister for Energy, Trade and Industry Tan See Leng told reporters on Oct 25 following the PAP's biennial conference.
Tan added that short-term electricity prices are unlikely to rise sharply, noting that gas prices are generally linked to global index movements. He said the government will allow Gas Supply, which is wholly owned by Temasek, to examine the commercial agreements and pursue any commercial remedies if needed.
EMA reported that the total reduction amounts to 17 BBTUD over 18 days, while Singapore's overall daily gas demand exceeds 1,000 BBTUD, with natural gas supplying about 95 percent of electricity generation. In recent months, the city-state has managed supply shortfalls of 20-100 BBTUD through alternative sources without incident.
Tan highlighted Singapore's multiple layers of energy security, including diversified gas imports, diesel reserves for power generators, and plans to build a second LNG terminal. He also mentioned ongoing diversification into biomethane and geothermal, with further details to be outlined at the Singapore International Energy Week starting Oct 26.
Prime Minister Lawrence Wong reiterated that all parties are expected to honour commercial commitments and that the gas importer will take steps to protect its rights and interests.