INDONESIA TO BAN GAS EXPORTS TO SINGAPORE

Written by Bryan Goh

What Happened?

Indonesia has decided to stop all gas exports to Singapore from the Suban Field in the country’s Corridor Block. the contract managed by ConocoPhillips expires in 2023. The Corridor Block has a supply of 300 million standard cubic feet per day, which will be diverted to cater to domestic demand. Indonesia also supplies piped gas via the 654-km West Natuna-Singapore subsea gas pipeline, but the country’s energy ministry has not commented on  whether this will be impacted. 

It is hoped that the decision will increase the value of Indonesia’s natural gas and reduce its trade balance deficit. This move also came on the back of depleting gas fields and the lack of new upstream projects in Indonesia.

 

What Does This Mean for Singapore?

Currently, 95% of Singapore’s electricity production comes from natural gas, up from26% in 2001.  Traditionally, most of Singapore’s supply of natural gas comes from Indonesia and Malaysia pipelines. Malaysia has yet to renew its natural gas contracts with Singapore, with similar concerns around pricing and domestic demand commitments likely to hamper future renewals. 

However, Singapore has been looking to diversify its supply sources, with a focus on Liquefied Natural Gas (LNG) on the grounds of energy security. The government decided to build an LNG terminal that began operations in May 2013, with a second terminal in the pipelines. LNG currently accounts for 28% of Singapore’s natural gas consumption and looks set for more growth with deals to help harness LNG in Singapore already signed.

 

Energy Sustainability and Security in Singapore

Growing electricity demand by the local population and growing power demand from data centres and other industries have led to a greater need for diversity and security in Singapore’s energy sector. Singapore to stay diversified and secure in their energy sector. Recent blackouts in 2018 and 2019 have also shown that the city-state is not immune to power failures. 

Even while Singapore takes pride in positioning itself as a business hub with excellent infrastructure, we must not become complacent and should look to achieve energy security and independence. 

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