S'pore firm seeks to buy Natuna gas
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)