Gas supply cut from Indonesia accounts for less than 2% of S’pore’s daily gas demand: EMA

Indonesia is reducing the amount of piped natural gas sent to Singapore. The gas comes through two direct connections, so these particular exports affect Singapore specifically. They do not represent a shutdown of every energy source available to the city-state.

One route carries gas from Indonesia’s Natuna Sea through a subsea pipeline to a receiving facility operated by Sembcorp Gas. The other carries gas from Sumatra’s Jambi Merang field to Gas Supply, Singapore’s importer. Indonesian reports identified reductions of 15 BBTUD from Natuna and 16 BBTUD from Jambi Merang.

The contracts for these supplies were expected to run until 2028. Singapore can also buy gas from other international sources, including LNG. The Energy Market Authority says contingency plans and alternative supplies can manage the reduction without threatening national energy needs.

The reduction is small compared with Singapore’s overall gas use. EMA says Singapore consumes more than 1,000 BBTUD of gas each day, while information from importers put the reduction at 17 BBTUD over 18 days. That is less than 2% of daily demand.

The comparison matters because natural gas supplies most of Singapore’s electricity. Even so, the reported shortfall is smaller than reductions Singapore has handled recently. Those earlier disruptions ranged from 20 BBTUD to 100 BBTUD during planned or urgent maintenance.

EMA says those previous shortfalls were replaced with other gas sources without incident. It also says Singapore has sufficient energy supplies and contingency plans. The immediate reduction therefore appears manageable, although replacing piped gas with LNG could affect procurement costs and exposure to global price changes.

Indonesia’s upstream regulator was quoted on Oct 23 saying exports to Singapore would be cut by 31 BBTUD from Oct 24. That was the figure reported in Indonesian media after an announcement by Djoko Siswanto, SKK Migas’s chief.

EMA later relied on information from Singapore’s natural-gas importers. Its spokesman said the total reduction amounted to 17 BBTUD over a period of 18 days. The article does not say whether the figures describe different contracts, time periods, supply routes, or operational estimates.

Therefore, the figures should not be treated as directly interchangeable. The 31 BBTUD number is the Indonesian announcement reported publicly, while 17 BBTUD is Singapore’s importer-based assessment of the disruption. EMA used the latter when comparing the impact with Singapore’s daily demand and describing its contingency response.

When some Indonesian pipeline gas becomes unavailable, Singapore can replace it with gas from other sources. This matters because natural gas supplies about 95% of the country’s electricity needs. EMA says it has contingency plans and sufficient energy supplies to meet national demand.

Singapore has already managed similar disruptions. In recent months, planned or urgent maintenance caused gas reductions of 20 BBTUD to 100 BBTUD. Other gas sources replaced those shortfalls without incident. Singapore GasCo is also operationally ready to import more gas when needed.

The main consequence may be cost rather than supply. Subodh Mhaisalkar said replacing piped gas with LNG could raise procurement costs and increase exposure to global price volatility. Still, analysts said this reduction is a small share of electricity demand, so the overall cost effect is unlikely to be significant.

Singapore does not depend on one gas source. It receives piped gas from Indonesia and Malaysia, while LNG can arrive from suppliers around the world. This diversity allows the country to replace Indonesian pipeline gas when deliveries fall.

The key mechanism is substitution. Singapore GasCo, the central procurer and supplier, can import more gas, including LNG. Power-generation companies must also maintain sufficient fuel reserves, including diesel reserves, for electricity production. EMA says these arrangements support its contingency plans.

LNG is an important safeguard, but it may cost more than piped gas and expose Singapore to global price volatility. The country is also expanding solar deployment and researching nuclear and geothermal technologies. These efforts could further diversify energy supplies, although the article does not give timelines or expected replacement volumes.

Indonesia and Singapore are linked by long-term gas arrangements because Indonesian fields supply Singapore through dedicated pipelines. Gas from Jambi Merang goes to Gas Supply, while Natuna gas reaches Sembcorp Gas through a subsea connection. One Sembcorp sales agreement was valued at about $1.9 billion.

The contracts create an established commercial framework for deliveries. In 2022, Jakarta agreed to extend supplies to Singapore until 2028, though at lower volumes than before. EMA says importers will pursue all relevant recourse in their contracts after the disruption. The article does not specify the legal remedies or compensation terms.

Long-term agreements can support predictable supply, but they do not prevent every interruption. Indonesia has been planning lower exports for years because domestic demand is growing. Singapore therefore combines contracts with LNG imports, alternative suppliers, contingency plans, and required fuel reserves.

Natural gas is a naturally occurring fossil fuel used as an energy source. The article does not give a technical definition, but it explains its central role in Singapore’s power system. About 95% of Singapore’s electricity needs are met with natural gas.

Gas can reach Singapore through pipelines from Malaysia and Indonesia, or as LNG shipped from suppliers worldwide. Power-generation companies use this fuel to produce electricity. When one pipeline supply is reduced, importers can obtain gas elsewhere, while companies must keep fuel reserves, including diesel reserves.

This heavy reliance makes supply diversity important. EMA says Singapore has sufficient supplies and contingency plans, and Singapore GasCo can import more gas. The country is also deploying solar panels and researching nuclear and geothermal energy. These efforts aim to broaden the energy mix, but natural gas remains the main electricity fuel described here.