Buyers of RI natural gas may team up

Buyers of RI natural gas may team up

Deutsche Presse-Agentur, Singapore

` Two rival buyers of Indonesian natural gas from Singapore may team up in a joint venture to get a better deal from seller Pertamina, a published report said on Thursday.

SembGas and Gas Supply Pte Ltd (GSPL) will soon meet to discuss the possible deal, The Business Times reported.

"A way should be found to coordinate purchases from Pertamina whilst maintaining the local competitive position," the high- level Energy System Review Committee (ESRC) was quoted as saying.

GSPL is owned by Temasek Holdings, the city-state's investment company which also holds an indirect stake in SembGas.

Under separate deals with the Indonesian national gas company, SembGas imports 325-500 million standard cubic feet of gas daily from West Natuna while GSPL brings in 350 million standard cubic feet from Asamera in Sumatra.

Another 150 million square feet of gas is brought in from offshore Trengannu, "although Malaysia has limited incremental gas supply cpability", the ESRC said.

The committee has recommended that SembGas could either take over GSPL's Indonesian gas contract, or the two could form a joint venture to manage their existing contracts with Pertamina, the newspaper said.

The city-state is likely to become even more dependent on Indonesia gas supplies unless alternative sources become available, the ESRC noted.

"This has clear security considerations in addition to commercial concerns regarding the price from the monopoly supplier," it cautioned.

The ESRC's overall objective is an open, competitive energy market in Singapore, with reliable, secure supplies in the long- term.

"With liquefied natural gas imports in (the) future, it is possible that gas prices would be delinked or have a limited peg to oil prices, as seen in LNG contracts in China and Taiwan," the ESRC was quoted saying.