Indonesia to stop gas supply to Singapore

The Indonesian government will no longer export natural gas to Singapore when the current contract with the neighboring country ends to ensure that local industries especially state electricity company PLN will have enough gas supply, Investor Daily business daily reported Thursday.

Speaking during a hearing with the Commission VII of the House of Representatives on Wednesday, Coordinating Economic Minister Hatta Rajasa said he had asked Energy and Mineral Resources Minister Darwin Zahedy to set up a legal team to renegotiate the gas contract with Singapore.

He also denied that his office had agreed to provide addition gas supply of 100 million british thermal unit (mmbtu) per day to the neighboring country. Hatta was referring to a statement made by the commission?s chairman Effendi Simbolon that Hatta?s office had agreed to add gas supply by about 100 mmbtu per day to Singapore.

Effendi said that the additional gas supply for Singapore was taken from the gas supply allocation for PLN?s Muara Tawar gas fired power plant in Bekasi, West Java. ?Due to the divertion of the gas supply to Singapore, Muara Tawar power plant has to use diesel fuel causing financial loss of about Rp 6 trillion,? he added.

Hatta denied the allegation. ?I want all gas export contracts to be terminated to ensure sufficient supply for the local industries,? he added.

Meanwhile Evita Legowo, the director general of oi and gas at the Energy and Mineral Resources Ministry, said at the hearing that her office was studying gas sales contracts with Singapore to find out if there was a possibility to switch the gas supply for the domestic market.

?We have formed a legal team involving the foreign ministry for the purpose,? she said, adding that she hoped the negotiations could be concluded by year-end. (*)