West Natuna gas supply is due back on line Wed: Report
Wednesday, November 19 2003 - 01:43 AM WIB
However, only up to 65 per cent of the gas contracted for will be available for the time being because the leak in a branch pipe under the South China Sea has not been fully repaired.
But homes and businesses here will not be affected, said the Energy Market Authority last night. PowerSeraya and Tuas Power, which together produce 55 per cent of the electricity consumed here, have switched to using diesel oil instead of natural gas.
A spokesman for SembCorp Gas, which owns the 640km pipeline, confirmed that the gas supply was being restored, but said the repairs were being handled by the company's Indonesian counterpart.
SembCorp Gas' 22-year contract to buy about 325 million cubic feet of natural gas a day began in 2001.
About 60 per cent of electricity produced here is from natural gas. The rest is from other fuel oil sources. Not all gas used here comes from West Natuna - Singapore also buys gas from Malaysia and South Sumatra.
But the West Natuna supply accounts for more than half the electricity produced here.
Some consumers have been worried about higher energy bills because using diesel to generate electricity costs a third more than using natural gas.
Prices have risen slightly in the National Energy Market. This is a common pool where electricity is bought and sold. Prices change every 30 minutes according to demand and supply.
The Energy Market Company, which monitors electricity prices here, said yesterday that the average price over the past four days was about $140 for each megawatt hour of electricity.
This is between $30 and $40 higher than last week's average and could be because of the switch to diesel oil.
But Mr Lau Gar Ning, chief executive officer of Tuas Power, which produces a quarter of Singapore's electricity, said that it is unlikely that consumers will end up paying more.
Electricity prices here are determined by demand and supply. And there has been no shortage in supply as the same amount of electricity is still being generated although some of it is being produced at a higher cost.
Also, many big companies have term contracts with power generation companies, which agree to supply the electricity at a fixed cost. So this means the power companies cannot pass on the costs to them.
As for households, there is unlikely to be a price hike unless the gas supply is not fully restored for a long time. This is because half the electricity tariff is based on fuel oil prices, of which natural gas is just one. These tariffs are reviewed monthly.
And other generation companies which are unaffected are more than willing to take up any slack in the market.
Said a spokesman for Senoko Power, which gets its gas from Malaysia and South Sumatra: 'Senoko Power has picked up additional market share during this period.'(*)