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Indonesia gas cuts: Essential energy contracts must be respected, says WP

The Indonesian government's decision to reduce its exports of gas to Singapore is regrettable, the Workers' Party (WP) said. It noted that recent comments on the haze situation have become fused with allegations of a conspiracy by Singapore's sovereign wealth funds to influence the status of Indonesia in financial markets, and, now, the Indonesia's announcement to curtail natural gas exports...

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Indonesia gas cuts: Essential energy contracts must be respected, says WP
Indonesia gas cuts: Essential energy contracts must be respected, says WP

The Indonesian government's decision to reduce its exports of gas to Singapore is regrettable, the Workers' Party (WP) said.

It noted that recent comments on the haze situation have become fused with allegations of a conspiracy by Singapore's sovereign wealth funds to influence the status of Indonesia in financial markets, and, now, the Indonesia's announcement to curtail natural gas exports to the Republic.

"WP regrets the latest decision by the Indonesian government to reduce its exports of gas to Singapore, if due to recent unconnected events," it said on Sunday (Oct 25) night.

It referred to past parliamentary questions on gas supplies from Indonesia filed between 2022 and 2023, noting that Parliament was informed in 2023 that piped natural gas supplies from Indonesia would decline from 2023, but that this would not affect consumers' electricity supply in Singapore.

Turning to the commercial contracts, WP said it agrees that the sanctity of such contracts , particularly those that entail Singapore's key utilities, is an issue of national importance.

And while the extent of the current reduction of gas exports would appear to be tolerable , the party said this episode is an important reminder on diversifying the country's energy supply chain, especially in an international environment that is increasingly unpredictable.

But it also acknowledged the facilitation of stable liquefied natural gas (LNG) procurement supply chains issued in the joint statement following the ninth Qatar-Singapore High-Level Joint Committee .

Singapore has prepared for such risks: PM Wong

Speaking at the People's Action Party's convention held at Singapore Expo on Sunday, Prime Minister Lawrence Wong said the country's gas importer will take the necessary steps to protect its rights and interests under these contracts.

On Saturday, the Energy Market Authority said in response to Indonesia's export cuts that the total reduction of 17 billion British thermal units per day (BTUD) over a period of 18 days amounts to less than 2 per cent of the country's total daily gas demand of more than 1,000 BTUD.

Contracts and cuts aside, PM Wong said Singapore has been preparing for such risks .

"We invested in liquefied natural gas (LNG) terminals to import natural gas from different countries, without having to rely on pipelines. This gives us more options to manage any disruptions to our gas supply."

Singapore GasCo, set up in 2025, acts as a central gas aggregator for the Republic.

It is intended to ensure that the country is adequately contracted for natural gas at all times, said its chief executive Allan Heng in an interview for the Singapore International Energy Week.

Meanwhile, Minister for Energy, Trade and Industry (Energy and Industry) Dr Tan See Leng said the reduction of exports of natural gas to Singapore is not expected to affect electricity prices in the short term.

"So I want to reassure and assure all Singaporeans that we have sufficient gas supply to meet our demand... we have sufficient replacement gas from other sources, and this includes LNG," he added.

Energy security is critical to Singapore, thus the country has multiple layers of defence in place including the diversification of natural sources of natural gas from around the world.

"I would like to urge all of our fellow Singaporeans, keep calm and carry on," he confidently stated.

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