Buyers of RI natural gas may team up

Two rival buyers of Indonesia natural gas from Singapore may team up in a joint venture to get a better deal from seller Pertamina, a report said on Thursday.

SembGas and Gas Supply Pte Ltd (GSPL) will soon meet to discuss the possible deal, The Business Times reported.

“ A way should be found to coordinate purchases from Pertamina whilst maintaining the local competitive position,” the high-level Energy System Review Committee (ESCR) was quoted as saying.

GSPL is owned by Temasek Holdings, the city-state’s investment company which also holds an indirect stake in SembGas.

Under the separate deals with the Indonesian national gas company, SembGas import 325-500 million standard cubic feet of gas daily from West Natuna while GSPL brings in 350 million standard cubic feet from Asamera in Sumatera.

Another 150 million square feet of gas is brought in from offshore Trengannu, “although Malaysia has limited incremental gas supply capability”, the ESCR said.

The committee has recommended that SembGas could either take over GSPL’s Indonesian gas contract, or the two could form a joint venture to manage their existing contracts with Pertamina, the newspaper said.

The city-state is likely to become even more dependent on Indonesia gas supplies unless alternatives sources become available, the ESCR noted.

“ This has clear security consideration in addition to commercial concern regarding the price from the monopoly supplier,” it cautioned.

The ESCR’s overall objective is an open, competitive energy market in Singapore, with reliable, secure supplies in the long-term.

“With liquefied natural gas imports in the future, it is possible that gas prices would bedelinked or have limited peg to oil prices, as seen in LNG contracts in China and Taiwan,” the ESCR was quoted saying.(*)