SembCorp starts sell Indonesian gas
Thursday, January 11 2001 - 04:30 AM WIB
Singapore utilities conglomerate SembCorp Industries Ltd said on Wednesday it has received the first imports of natural gas from Indonesia's West Natuna Sea field and started delivery to customers, according to Reuters news agency.
"The gas is now at our shores -- which is six months ahead of schedule," Wong Kok Siew, SembCorp's deputy chairman and chief executive officer, told a news conference.
A SembCorp statement said SembCorp Gas (SembGas), a 50 percent owned unit of SembCorp Utilities, began receiving the gas via a 640-km (400-mile) sub-sea pipeline on January 3.
Singapore government investment firm Temasek Holdings has a 30 percent stake in SembGas, with Belgian utility company Tractebel holding the remaining 20 percent.
SembCorp shares were up six cents at S$1.86 in late trade.
SembCorp said SembGas had started delivery of the gas supplies to its customers and was considering plans to build a facility to support specialty chemical companies.
"In addition to our existing offtakers like Tuas Power, SembCorp Cogen, Power Seraya, ExxonMobil Corp and Ellba, we have signed up 25 new offtakers in the pharmaceutical, electrical, food, beverages and other industries," it said.
The gas will be delivered to the new customers via a medium pressure reticulation network in the second quarter of 2001.
SembCorp Industries said it had invested in the S$120 million project on the Singapore side with 70 percent funding from banks and 30 percent equity.
Profit contribution starts
SembGas signed a 22-year gas sales agreement in 1999 with Pertamina, Indonesia's state-owned oil and gas firm, to buy 325 million standard cubic feet per day of natural gas, which has been fully contracted out.
The contracted delivery date was July 15, 2001. Full delivery of the contracted quantity is expected by early 2002, generating revenues of US$1 million per day.
"The full offtake will be taken from our customers in the first quarter of 2002," Francis Gomez, general manager of SembGas, told reporters.
"At that point in time, the bottom line contribution to SembGas will be basically a double-digit figure, closer to the S$15-20 million range (per year)."
SembCorp confident of Indonesian commitment
When asked about contingency plans for possible disruption in supplies due to political uncertainty in Indonesia, Wong said he was confident that Indonesia would honour its commitment.
"This is an international contract," he said.
Wong said an international consortium called the West Natuna Group -- Conoco Indonesia Inc , Canada's Gulf Resources Kakap Ltd and Britain's Premier Oil Natuna Sea Ltd -- had production sharing contracts with Pertamina and the concession to deliver the gas to Singapore.
"I don't see any worry about that," he added.
The company said it may also expand the import gas volumes for two new projects now in the pipeline.
SembCorp said there were studies underway to use natural gas for public transportation and planned to build Singapore's first natural gas liquid facility to support specialty chemical firms operating on Jurong Island, should it be feasible and profitable.
"SembGas has the necessary infrastructure and customer base to support a gas-based petrochemical industry," Gomez said.
He said SembCorp Utilities would build a S$150 million natural gas liquid plant for possible launch in the second half of 2004, should the industry demand justify it.
To meet future demand for natural gas in Singapore, the pipeline between SembGas and its source in West Natuna has been built with a capacity for more than 700 million standard cubic feet per day. (*)