S'pore firm seeks to buy Natuna gas

JAKARTA (JP): A Singapore consortium led by Sembawang Corp. will continue its quest to buy natural gas from the Natuna island, despite the Indonesian government's cutbacks on big infrastructure and development projects.

Sembawang's chairman Philip Yeo was quoted by Singapore daily The Business Times yesterday as saying that the project was "on track" to reaching a final deal and would not be derailed by the recent measures.

"Singapore is the first serious customer for gas from the area and the project will generate revenue for Indonesia," Yeo told the daily Wednesday.

The government announced earlier this week the postponement or review of Rp 105 trillion (US$35.35 billion) worth of government and state-related projects to cope with the currency crises.

Mining and energy sectors are among those hardest hit by the drastic measure, with the postponement of 14 power generation projects and two oil refineries.

The consortium, comprising Sembawang, Tuas Power and EDB International, proposed earlier to buy $300 million of natural gas a year from West Natuna, starting from the year 2000, to fuel power stations and petrochemicals in Singapore.

The preliminary pact was signed in May with Indonesia's state- owned gas and oil company, Pertamina, which agreed to supply natural gas to Singapore via a 480-kilometer underwater pipeline linking West Natuna to the island state.

Singapore agreed to finance one-third of the submarine pipeline estimated to cost between US$300 million and US$450 million.

Yeo said the gas sales agreement, scheduled for signing before the year's end, would also prompt the go-ahead for Sembawang Engineering and Construction (Sembec) to build a 700-megawatt cogeneration power plant on Pulau Sakra.

Pulau Sakra would also benefit from the Indonesian gas supply, he said.

The Natuna gas field, one of the world's largest gas fields, contains 222 trillion cubic feet of natural gas.

The project is 50 percent owned by United States' Exxon Corp, 26 percent by Mobil Corp and 24 percent by Pertamina.

A Japanese consortium comprising eight trading houses and three exploration firms is expected to buy up to a 13 percent stake in the project from Pertamina later this year. (das)