Singapore Power says deal with Pertamina continues

Singapore Power says deal with Pertamina continues

SINGAPORE (Dow Jones): Singapore Power Ltd. Chairman Ho Kwon Ping Wednesday said the Indonesian presidential elections wouldn't have an impact on Singapore Power's Sumatra natural gas deal with Indonesia state-owned gas and oil company Pertamina.

"We have been dealing (with Pertamina) totally above board," Ho said. "The gas deal can withstand any scrutiny. Any government will support the deal."

Ho was speaking on the sidelines of the World Economic Forum's East Asia Economic Summit in Singapore.

He said the US$7 billion gas deal was a "totally win-win" situation for both Singapore and Indonesia, so a change in Indonesian leadership won't have an impact on the agreement.

But Ho said the Sumatra gas deal will stand up regardless of who becomes president.

Abdurrahman Wahid, a moderate Muslim intellectual, on Wednesday beat popular opposition leader Megawati Soekarnoputri in a thrilling election to become Indonesia's fourth president.

"There is no controversy in the deal," Ho said. "And we went into this fully aware that there might be a change in government (in Indonesia)."

Singapore Power signed a letter of agreement with Pertamina Sept. 22 to buy $7 billion worth of natural gas from the Asamera fields in southern Sumatra from Pertamina for 20 years beginning in 2002.

The Asamera fields are operated by Gulf Indonesia Resources Ltd.

Ho said there "is transparency in our deal," in part because the Asian Development Bank is providing a $300 million loan to go toward the construction of the 135-kilometer pipeline that will link the Sumatra gas fields to Singapore.

The imported natural gas will be used to fuel Singapore Power's electricity generation plants and for its petrochemical and refining industries.

"One has to assume that business in Indonesia with the rest of the world has to go on" after the presidential election, despite the election's controversial nature, Ho added.