Indonesia defends gas cuts to Singapore

Indonesia has reduced natural gas (XNGUSD) exports to Singapore by 31 million standard cubic feet per day, while maintaining that the move remains within existing contractual limits. Energy and Mineral Resources Minister Bahlil Lahadalia said the cut, which began on a Saturday, represents about 8 per cent of the 409.55 million supplied through pipelines from the Natuna Sea and mainland Sumatra and falls within minimum export volumes stipulated in the contracts.

Bahlil said the contractual minimum stands at around 91 to 92 billion British thermal units per day, and that Indonesia has only reduced exports by about 8 per cent. He stated that contract terms would be breached only if cuts reached 10 per cent, stressing that the country understands its obligations and takes them seriously.

Indonesian authorities say the export cuts are intended to divert more gas to domestic electricity demand. The upstream oil and gas regulator SKK Migas indicated that 15 million standard cubic feet per day from Natuna is being redirected to state-owned utility PLN Batam via the WNTS–Pulau Pemping–Batam pipeline. Supplies from Sumatra are being rerouted through the TGI pipeline to support electricity needs in Batam, Bintan and Sumatra.

Bahlil linked the decision to strong domestic demand and noted that Indonesia would review its plans for future energy exports, including electricity, while weighing multiple factors. Earlier in the month, Batam and several cities in the Riau Islands province experienced a 16-hour blackout, adding pressure to bolster local power supply.

Singapore’s Energy Market Authority estimated that the 31 million standard cubic feet per day export cut accounts for less than 2 per cent of Singapore’s total daily gas demand.

Singapore Prime Minister Lawrence Wong said the gas supplies are covered by commercial contracts and that all parties are expected to honour their commitments. He added that Singapore’s gas importer would take the necessary steps to protect its rights and interests under these contracts, while Singapore’s broader energy strategy includes looking beyond natural gas (XNGUSD) toward cleaner sources that can provide reliable electricity around the clock.

Bahlil highlighted that Indonesia’s gas exports have been sold at what he described as relatively economical prices of around US$20 per million British thermal units. He also rejected external criticism of Indonesia’s contract performance, saying the country does not need to be lectured on honouring agreements and reiterating that current reductions stay within minimum limits.

Asked whether the export cuts would be made permanent, Bahlil described the situation as fluid and did not give a definitive answer. He noted that force majeure circumstances can arise and raised the possibility in general terms, although he did not state that Indonesia had invoked such provisions. Existing gas supply contracts with Singapore are in place until the end of 2028, and Indonesia has raised the possibility of not renewing some export contracts with neighbouring countries to prioritise domestic needs.