S'pore Power wants to cut gas supply from Pertamina

S'pore Power wants to cut gas supply from Pertamina

SINGAPORE (Dow Jones): Boey Tak Hap, president and chief executive officer of Singapore Power Ltd., said Thursday that his company has made an offer on 75 million cubic feet of natural gas a day for 22 years from SembGas, a unit of Sembcorp Industries (P.SEC).

Boey also confirmed that Singapore Power wants to reduce the amount of natural gas it has discussed buying from Indonesian state-owned oil and gas company Pertamina's Asamera fields by 50 million cubic feet a day. The Asamera fields are operated by Gulf Indonesia Resources Ltd.

Singapore Power and Pertamina signed a memorandum of understanding in September 1998 for the delivery of 150 million cubic feet of natural gas a day from Asamera in 2001. The volume was slated to increase eventually to about 300 million cubic feet a day.

Boey said the SembGas negotiations should have "no impact on Pertamina discussions."

Singapore Power Chairman Ho Kwon Ping said his company expects the Pertamina natural gas deal "to conclude soon. Discussions are ongoing and we're optimistic."

Ho added that a change of leadership in Indonesia's government wouldn't have an adverse impact on the gas negotiations.

Ho said he wouldn't speculate on a time frame for the Pertamina deal to close. "It's a major project...with many complicated factors. But we believe it is on track and progressing smoothly."

In June, Priyambodo Mulyosudirjo, Pertamina senior vice president and director, said talks with Singapore Power on the Asamera gas had stalled because Singapore Power wanted to buy a smaller volume of gas than originally discussed.

Singapore Power denied the report.

The companies had expected to finalize an agreement in March of this year, but failed to do so after controversy arose over tenders for the building of a 135-kilometer pipeline linking the Sumatran natural gas field to Singapore. The pipeline is estimated to cost about $354 million.