RI, Singapore mend ties with gas project

RI, Singapore mend ties with gas project

SINGAPORE (JP): President Abdurrahman Wahid and Singapore's
Prime Minister Goh Chok Tong jointly launched a landmark gas
pipeline project on Monday, signaling both countries remained
good neighbors despite recent strained relations.

"Our participation in these bilateral projects signals
strongly to the international community Singapore's confidence in
the fundamental prospects of Indonesia," Goh said at the official
launch of the West Natuna natural gas pipeline.

The project delivers natural gas from the West Natuna area in
the South China Sea to Singapore.

The ceremony to launch the project came as both countries were
attempting to improve relations that have been strained by
Abdurrahman's outburst against remarks made by Singapore's Senior
Minister Lee Kuan Yew.

Abdurrahman, also known as Gus Dur, voiced anger in a meeting
with the Indonesian citizens during a visit to the city state
last November over Lee's alleged suggestion that he resign.

Gus Dur further launched criticism against Singapore, calling
the island-state money-grabbing and accused the majority Chinese
population of the island of looking down at the minority Malay
population.

Singapore, which has extensive ties with Indonesia, did not
officially display any emotion over Wahid's outbursts.

Indonesian top officials were quick in trying to keep the
bilateral relations on track despite the incident with Minister
of Foreign Affairs Alwi Shihab downplaying the matter, saying the
relations between Singapore and Indonesia were like those between
a husband and wife.

Abdurrahman came to the ceremony in the company of a high-
profile delegation, including Coordinating Minister of Economy
Rizal Ramli, Minister of Foreign Affairs Alwi Shihab, Minister of
Industry and Trade Luhut Pandjaitan and Minister of Energy and
Mineral Resources Purnomo Yusgiantoro.

Gus Dur said in his speech that the gas pipeline was "a
pioneer project".

"Besides oil and gas, in the future I think we could cooperate
further in the use of palm oil for energy," he said.

The gas delivery to Singapore is Indonesia's first gas export
to Singapore as well as the first gas export via pipeline for
Indonesia, which is known as a leading liquefied natural gas
(LNG) exporter.

Under the contract signed by Pertamina and Singapore's gas
trading firm SembCorp Gas in January 1999, Pertamina and its
production-sharing contractors will send 325 million cubic feet
per day (MMCFD) of natural gas to Singapore through a 656-
kilometer-long underwater pipeline.

The gas is being delivered to Jurong island in Singapore,
where the island-state has built a multi-billion-dollar giant
petrochemical and power plant complex.

The production-sharing contractors, grouped in the West Natuna
Gas Consortium, are Conoco Indonesia, a subsidiary of American
energy firm Conoco Inc., Gulf Indonesia Resources, a subsidiary
of Canadian firm Gulf Canada Resources, and British-based Premier
Oil.

The construction of the giant pipeline, billed as one of the
world's longest underwater pipelines, was completed by American
construction firm McDermott Indonesia last month allowing
Pertamina and the West Natuna Gas Consortium to send the first
gas to Singapore on Jan. 3, six months ahead of schedule.

According to Pertamina, the Indonesian government would
receive between US$6 billion and $7 billion in revenue throughout
the contractual period of 22 years.

Goh said aside from the West Natuna area, Singapore had also
planned to import gas from Sumatra under the second gas deal
being negotiated between Pertamina and power company Singapore
Power's subsidiary Gas Supply Ltd.

"Even as we celebrate the first delivery of natural gas from
West Natuna, we are already in an advanced stage of discussion
for a second gas project. Singapore Power is working with
Pertamina to bring natural gas from Sumatra to Singapore," Goh
said.

"These two projects show clearly the significant mutual
benefits that can be derived from bilateral cooperation," Goh
said.

Under the preliminary agreements signed several months ago,
Pertamina will send gas from Gulf's gas fields in South Sumatra
and Jambi and American firm Santa Fe International Corporation's
gas field in Jambi to Singapore through pipeline which would be
built to link Sumatra, Batam and Singapore for 22 years starting
in the third quarter of 2003.

Gas will initially flow at a rate of 150 MMCFD, ramping up to
350 MMCFD within five or six years.

Pertamina's director of production sharing contractors Iin
Arifin Takhyan told reporters during the ceremony that the deal
was expected to be clinched next month.

He said the second gas project would provide revenue to the
Indonesian government similar to the proceeds from the West
Natuna gas project. (bkm)