JAKARTA: Indonesia is reducing natural gas exports to neighbouring Singapore as President Prabowo Subianto seeks to shore up domestic supply and strengthen energy security for South-East Asia’s largest economy.
Pipeline gas deliveries to the city-state were being cut by about 31 million standard cubic feet per day to help bolster domestic energy generation, said Djoko Siswanto, who leads SKK Migas, the government agency overseeing Indonesia’s upstream oil and gas industry.
The cuts are equivalent to about 14% of Indonesia’s average pipeline-gas exports to Singapore last year, according to Bloomberg calculations based on energy ministry data compiled from SKK Migas reports.
Singapore’s Energy Market Authority (EMA) said in an emailed statement that the country had sufficient energy supplies.
The reduction is expected to be over a period of 18 days, and represents less than 2% of total daily gas demand, according to the EMA.
Indonesia is the biggest supplier of gas to Singapore, which depends on the imported fuel for nearly all of its power generation.
“We have contingency plans in place to deal with such reductions,” the EMA said last Saturday. Singapore GasCo is ready to import more liquefied natural gas (LNG) at any time, the EMA said.
SKK Migas’ Siswanto said in a text message that 15 million scfd sourced from Natuna would be diverted to a state utility unit in Batam, a data-centre and tourism hub.
Meanwhile, 16 million scfd from Sumatra would go toward supporting electricity needs in Batam, Bintan and Sumatra.
Local media reports earlier cited Djoko as saying last Friday that the cuts don’t affect any other country. The reduction was effective last Saturday.
Singapore’s Gas Supply Pte, which imports gas from Indonesia, said it’s already seeing an impact.
“Delivery of gas to our customers has been affected by temporary reductions in supply from our upstream supplier in Indonesia,” a Gas Supply spokesperson said in an email last Saturday, adding the company is engaging with its supplier and customers to manage the situation.
Sembcorp Gas Pte, another importer of Indonesia gas, didn’t immediately respond to a request for comment outside of regular business hours.
While Indonesia is a major gas exporter, overseas shipments have declined in recent years as a growing share of output is directed to domestic use.
Major LNG markets include China, Japan and South Korea, while pipeline natural gas is sent to Singapore and Malaysia.
A 16-hour blackout in Batam earlier this month, affecting more than 411,000 customers, has made Indonesia’s move to divert more gas toward domestic electricity generation more prescient.
The government replaced the chief executive of state-owned electricity giant PT Perusahaan Listrik Negara following the outage.
Prabowo this week stressed the importance of safeguarding Indonesia’s natural resources and prioritising domestic needs in a wide-ranging speech to cabinet members.
He also touched on regional haze, the threat of a market downgrade by MSCI Inc and the progress of his administration two years into his five-year term.
Speaking after the address, Coordinating Minister for Downstreaming and Energy Transition Bahlil Lahadalia echoed the president’s call for economic self-reliance and suggested Indonesia could curb gas exports to “neighbouring countries”.
“If other countries have a different view of us, they should be careful,” he told reporters.
“I, for one, might consider not extending gas exports to neighbouring countries –because, after all, we are in survival mode and must prioritise meeting our own domestic needs.” — Bloomberg
