Gas Supply may pursue remedies if contract breached following Indonesia’s export cuts: Tan See Leng

[SINGAPORE] Local gas importer Gas Supply will engage its suppliers to find out if there has been a breach of contract following Indonesia’s move to cut its gas supply to Singapore, and pursue commercial remedies if needed, said Minister for Energy, Trade and Industry (Energy and Industry) Tan See Leng.

The Republic’s gas supplies are covered by commercial contracts which are expected to be honoured, he told reporters in an interview on Oct 25 after the PAP’s biennial conference.

Indonesia had said it would cut natural gas exports to Singapore by 31 billion British thermal units per day (BBTUD) from Oct 24. This was framed in Indonesian media reports as part of President Prabowo Subianto’s government moves to prioritise domestic energy needs amid growing concerns over energy security.

This reduction in piped gas supply from Indonesia will make up less than 2 per cent of Singapore’s total daily gas demand, the Energy Market Authority said.

Tan gave the reassurance that Singapore has sufficient gas supply to meet its demand.

“We have sufficient replacement gas from other sources, and this includes liquefied natural gas,” he added.

Asked about the possible impact on electricity prices, Tan said prices would not be affected that much in the short term due to Indonesia’s move, and Singapore should instead be looking at fluctuations in global prices.

This is because the unit price of gas is usually pegged to the movement of some of the key global indexes, he noted.

Gas Supply, which is wholly owned by Temasek, said on Oct 24 that its delivery of gas to customers here has been affected by “temporary reductions” in supply from its supplier in Indonesia.

On how long it will take to find out if the commercial contracts have been breached, Tan said he will leave it to Gas Supply to closely examine what remedies there are in the commercial contracts that they have entered into.

EMA said that based on the information from Singapore’s natural gas importers, the total reduction amounts to 17 BBTUD over a period of 18 days.

Singapore’s total daily gas demand amounts to more than 1,000 BBTUD. Singapore relies on natural gas for around 95 per cent of its electricity needs. In 2025, 40 per cent of the supply came via pipelines from Malaysia and Indonesia. The rest was supplied by sea from markets around the world.

The reduction affects gas supplied through pipelines from Natuna and Sumatra, and the cuts would affect only Singapore because the relevant export pipelines were connected directly to the city-state. Checks showed that the natural gas from Sumatra is exported to Gas Supply, and the Natuna pipeline connects to a receiving facility operated by Sembcorp Gas.

Singapore had experienced reductions in its gas supply ranging from 20 BBTUD to 100 BBTUD in recent months, a result of planned or urgent maintenance. That shortfall had been replaced with other gas sources without incident, EMA pointed out.

Tan said Singapore has multiple layers of defence in place to ensure its energy security, including diversifying its sources of natural gas and requiring power generation companies to maintain sufficient diesel reserves to guard against gas supply disruptions.

In the medium term, the Republic is building a second LNG terminal and diversifying its energy mix - including exploring alternative energy sources such as biomethane and geothermal, he added.

Tan added that he will elaborate more on the Republic’s future energy mix at his opening speech during the start of the Singapore International Energy Week conference on Oct 26.

“So I would like to urge all of our fellow Singaporeans: keep calm and carry on. We have dealt seamlessly with such reductions in the past, without any incident, and the government will continue to ensure the reliability and the resilience of Singapore’s energy supply,” he said.

At the PAP conference, Prime Minister Lawrence Wong said Singapore expects all parties to honour their commitments made under commercial contracts, and the country’s gas importer will take necessary steps to protect its rights and interests.

Indonesia has been planning to reduce gas exports to Singapore for several years to meet growing domestic demand. In 2022, Jakarta agreed to extend gas supplies to Singapore until 2028, but at lower volumes than under the previous contract.

Asked about the timing of Indonesia’s decision to reduce its gas supply and if this was in direct response to Singapore’s comments on the haze issue, Tan said he was not in a position to comment. THE STRAITS TIMES