Pertamina and Singapore Power sign sales agreement for supply of natural gas to Singapore
12 February 2001
Singapore Power Limited (SP), through its subsidiary PowerGas Ltd and PERTAMINA signed a gas sales agreement with PERTAMINA, Indonesia for the supply of natural gas to Singapore from the year 2003.
Singapore Power Limited (SP), through its subsidiary PowerGas Ltd and PERTAMINA signed a gas sales agreement with PERTAMINA, Indonesia for the supply of natural gas to Singapore from the year 2003. Agreement was signed in the presence of Brigadier General (NS) George Yeo, Minister for Trade & Industry, Singapore and Mr Purnomo Yusgiantoro, Minister for Energy and Mineral Resources for Indonesia. Also present were Mr Lim Swee Say, Acting Minister for the Environment, Singapore, Mr Ng Kee Choe, Chairman, Singapore Power, Brigadier General (NS) Boey Tak Hap, President & CEO, Singapore Power and Mr Timothy Chia, Chairman, PowerGas.
The gas sales agreement is for the supply of a contract quantity of 2.27 trillion standard cubic feet (TSCF) of natural gas to Singapore from the gas fields in South Sumatra, Indonesia. 150 million standard cubic feet (MMscfd) will be supplied initially on a daily basis with the volume being increased to 350 MMscfd by the year 2009. The US$9 billion contract is valid for a period of 20 years commencing 2003 with a provision for further extension should both parties so require.
The gas supply will be piped through a 500km high-pressure pipeline originating from the Grissik Gas Plant, passing through the Jabung Block en route to Batam and onward to Singapore. The gas transporter is PT, Perusahaan Gas Negara (PGN). The gas fields in South Sumatra in the Corridor Block and South Jambi 'B' Block are operated by Gulf Indonesia Resources Ltd and those at the Jabung Block are operated by Santa Fe Energy Resources (Jabung) Ltd.
Through its wholly-owned subsidiary Gas Supply Pte Ltd, PowerGas will import natural gas to Singapore with the first delivery of gas expected around mid-2003.
On the sealing of the deal, Mr Ng Kee Choe, Chairman of Singapore Power said, "The signing of the Gas Sales agreement marks the culmination of 3 years of negotiations between Pertamina and Singapore Power. In September 1999, when we signed the Letter of Agreement for the supply of natural gas from Sumatra to Singapore, we stated that this would be a win-win collaborative effort by all parties involved. The signing ceremony today is a major milestone and a big step forward in that effort. We have every confidence that the Letter of Agreement will be fulfilled to the benefit of all parties involved."
Brigadier General (NS) Boey Tak Hap, President & CEO of Singapore Power said, "The conclusion of the gas deal signifies the beginning of a mutually beneficial relationship between Singapore Power and PERTAMINA. It will yield long term economic benefits for both Indonesia and Singapore. For Singapore, the import of more natural gas will promote competition in the electricity and gas industries. With the liberalisation of the electricity industry, more combined cycle gas turbine power plants will be built to meet the growing demand of electricity in Singapore. The use of more natural gas which is a clean fuel will also help to reduce pollution and enhance the environment in the region,"
For the supply of natural gas to Singapore for power generation, Gas Supply Pte Ltd has also signed End-User Agreements with Singapore Power’s generation companies, viz PowerSenoko and PowerSeraya.
The gas shall be transported through a new 28-inch pipeline of approximately 500km in length, that will be built by PGN, an Indonesian state gas pipeline company, from Grissik to the Singapore/Indonesian border via Sakernan.
Under the terms of the Co-ordination Agreement; PGN will then link its pipeline with the 28-inch pipeline that PowerGas is constructing and operating from the border to Jurong Island in Singapore. In this way, PowerGas shall then transport the gas on behalf of the Buyer to its final destination.