SembCorp may up W. Natuna gas imports if PGN pipe delayed: Report
Thursday, February 21 2002 - 04:20 AM WIB
"If there are people knocking on our door saying look, we need to sign on additional gas...and if they are prepared to sign long-term contracts, we will definitely negotiate with Pertamina and ask for an increase" in gas from West Natuna, Low was quoted as saying by Dow Jones Newswires.
However, she said SembCorp hasn't yet been approached by South Sumatra gas customers, some of whom also buy its gas.
SembCorp's unit, SembCorp Gas, is Singapore's only retailer of imported gas, although a power generator imports gas from Malaysia. It has committed its contracted volume of 325 million standard cubic feet per day (MMCFD), but the West Natuna pipe can transport as much as 700 MMCFD.
Gas sales accounted for S$2.5 million (US$=S$1.8285) of SembCorp Industries' profit after tax and minority interest in 2001, the first year of imports.
South Sumatra gas imports - slated to begin in 2003 - may be delayed. Indonesia's PT Perusahaan Gas Negara must sell a stake in its Transgasindo unit to raise funds for the Singapore pipe and to meet loan requirements from the Asian Development Bank, but its partner hasn't yet been named.
PGN recently postponed the bidding deadline for the Transgasindo stake to March 26 from mid-February. Its strategic partner won't be named until April 15, thus narrowing the window for pipeline construction before gas is due to arrive in Singapore in August 2003.
A unit of Singapore Power Ltd. holds the gas import contract and gas sales agreements with Singapore electricity generators. Gas Supply Pte Ltd was divested to government investment arm Temasek Holdings in January.
If the pipeline isn't completed on time, PGN faces penalties of up to US$18,000 a day, capped at US$27 million. (*)