Jakarta Globe: Cut Natural Gas Exports to Singapore – Indonesian Minister

The Jakarta Globe reports on Indonesia’s Coordinating Minister for the Economy, Hatta Rajasa’s repeated call to cut natural gas shipments to Singapore.

Cut Natural Gas Exports to Singapore: Indonesian Minister

Indonesia’s top economic minister Hatta Rajasa yesterday urged the government to cut what he called excessive natural gas shipments to Singapore because they were hurting domestic industries, which do not have enough supplies to meet their growing needs.

“Indonesia needs its own gas,” he told a parliamentary commission that oversees the energy sector.

“The gas supply to Singapore is too much … Exports to Singapore should stop,” he added.

Rajasa has asked Energy Minister Darwin Zahedy Saleh to set up a legal team to renegotiate all gas sales contracts with Singapore.

The Coordinating Minister for the Economy made the remarks following a report that a power plant run by state utility Perusahaan Listrik Negara had to incur a loss of Rp 6 trillion ($678 million) when it was forced to switch to using oil because of inadequate natural gas supplies.

With domestic demand for energy rising and its crude oil reserves dwindling, Indonesia is turning increasingly to non- oil energy sources such as natural gas. But it has been struggling to cope with domestic gas shortages.

Rajasa made a similar call to reduce gas shipments to Singapore in June last year.

But he also said at the time that Indonesia could not “unilaterally cut or stop the supply” to Singapore.

The Republic uses natural gas to generate 80 per cent of its electricity, with the bulk of the supplies coming from Indonesia. The two countries have signed two long-term gas contracts.

Indonesian lawmaker Dito Ganinduto said Singapore receives about 790 million cubic feet of piped natural gas a day from several fields in South Sumatra and the Riau Islands.

The first deal, signed with Sembcorp Gas in 1999, was for a 22-year term, while the second was signed with Gas Supply in 2001 for a 20-year tenure.

Indonesia, the world’s third-largest exporter of liquefied natural gas, after Qatar and Malaysia, sells more than 60 per cent of its output to countries such as Japan and South Korea. The country also exports its natural gas.

But faced with an expanding economy and the need to reduce dependence on crude oil for energy, there have been calls for the government to keep more gas for domestic use.

Image by EnergyTomorrow

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