Indonesia cuts Singapore pipeline gas to supply domestic power
Indonesia has redirected part of its pipeline gas exports to Singapore to meet domestic electricity needs. The change began on October 24 and amounts to about 9 per cent of pipeline supplies. The reassigned gas comes from Natuna and Sumatra, after a prolonged blackout affected Batam and other Indonesian cities earlier this month.
Economics & Markets··Evening
Gas is reassigned to Indonesia’s domestic needs
Indonesia began reducing natural gas exports to Singapore on October 24, prioritising domestic demand. The decision was announced by the Upstream Oil and Gas Special Task Force, known as SKK Migas, the Indonesian body overseeing oil and gas production. Its head, Djoko Siswanto, described a change in the allocation of supplies previously destined for the neighbouring country.[1], [2]
Reuters reported that 31 million standard cubic feet a day of pipeline gas was being redirected to electricity generation inside Indonesia. That represents approximately 9 per cent of pipeline supplies to Singapore. The regulator’s figures cover specified daily deliveries from two producing areas: 15 million standard cubic feet from Natuna and another 16 million from Sumatra.[1]
Power needs follow a prolonged blackout
The reassigned gas is intended for electricity needs in Batam and Bintan, Indonesian islands, and Sumatra. Siswanto said the purpose was to protect reliable domestic supplies for power production. Gas that had been allocated for export is therefore being directed to the domestic electricity sector under the adjustment announced by the regulator.[1]
Earlier in October, Batam and several other cities in Indonesia’s Riau Islands province experienced a blackout lasting 16 hours. The export reduction follows that disruption. The locations named for the redirected gas include Batam, one of the places affected by the lengthy interruption, alongside Bintan and Sumatra.[1]
Export contracts face an energy-security review
Energy minister Bahlil Lahadalia had said earlier in the week that domestic needs would take priority in the use of natural resources. He also said contracts would be reviewed to maintain energy security. Most Indonesian gas exports to Singapore travel through pipelines, while Singapore uses natural gas to generate up to 95 per cent of its electricity. The announced adjustment concerns part of those pipeline deliveries, with the Natuna and Sumatra volumes set out as daily flows.[1]
