Govt pursues plan to renegotiate gas sale to Singapore

The Ministry of Energy and Mineral Resources has officially sent a letter to the Ministry of Foreign Affairs to express intention to renegotiate with the Singaporean government on the volume of gas supply to Singapore from Sumatra.

?We have communicated with the Ministry of Foreign Affairs that the best option is a government-to-government renegotiation,? Minister of Energy and Mineral Resources Darwin Z. Saleh over the weekend.

The renegotiation aims to reduce the volume of gas supplies to Singapore from Sumatran gas fields so that there are more gas available for domestic market. State owned gas distribution firm PT Perusahan Gas Negara (PGN), which relies on gas supplies from Sumatra, to meet costumers? demand in Java, has often said that it needs more supplies to meet the growing demand in Java.

The Sumatran gas is pipelined to Gas Supply Pte Ltd, a subsidiary of Singapore Power, which is linked to Temasek, the investment arm of Singaporean government. The contract was signed by ConocoPhilips and Gas Supply Ptd. Ltd for 20 years since 2003.

The government chose to renegotiate the contract on a government-to-government basis because it consider a business-to-business will be difficult to do. (Bernard)