WP regrets Indonesia’s move to cut gas exports to S’pore, stresses importance of honouring contracts

SINGAPORE – The Workers’ Party said it regrets the Indonesian government’s decision to cut natural gas exports to Singapore if the move was prompted by recent unrelated developments, and stressed the importance of honouring international commercial contracts.

In a statement posted on Facebook on Oct 25, the opposition party backed Prime Minister Lawrence Wong’s call earlier in the day for commercial gas supply contracts to be honoured.

“The WP agrees that the sanctity of international commercial contracts, particularly those that cover our key utilities, is an issue of national importance,” the party said.

It added that while the extent of the current reduction of gas exports to date by Indonesia appears tolerable, the episode is a reminder of the importance of diversifying Singapore’s energy supply chains, especially in an increasingly unpredictable international environment.

The WP’s remarks come amid tensions over the transboundary haze affecting Singapore and the region.

The party noted that recent comments by current and former Indonesian officials on the haze had become conflated in some quarters with allegations of a conspiracy by Singapore’s sovereign wealth funds to influence Indonesia’s standing in financial markets, as well as Indonesia’s latest decision to curtail gas exports.

Indonesia announced on Oct 24 that it would reduce natural gas exports to Singapore by 31 billion British thermal units per day (BBTUD), as part of efforts to prioritise domestic energy needs. The reduction involves gas supplied through pipelines from Natuna and Sumatra.

Earlier in the week on Oct 20, former Indonesia trade minister Muhammad Lutfi alleged that GIC and Temasek had pressured global index provider MSCI to consider downgrading Indonesia’s stock market classification, purportedly to trigger a sell-off that would allow investors to acquire Indonesian shares at lower prices. 

Both Singapore investment entities rejected the allegations the next day, with Temasek describing them as “patently untrue”.

The Energy Market Authority has also since said Indonesia’s gas export cuts, based on information from natural gas importers, amounted to 17 BBTUD over a period of 18 days, or less than 2% of the Republic’s daily gas demand.

In its statement, the WP expressed regret over Indonesia’s decision “if due to recent unconnected events”, which it clarified referred to the haze situation and allegations involving GIC and Temasek.

The WP noted that Parliament had been informed in 2023 that piped natural gas supplies from Indonesia would decline from that year, but that consumers’ electricity supply would not be affected.

It said its MPs had been tracking the issue of gas supplies from Indonesia through their work in Parliament.

In 2022, Aljunied GRC MP Gerald Giam had asked about unplanned curtailments of piped natural gas supplies from Indonesia and measures to improve their reliability.

Then Minister for Trade and Industry Gan Kim Yong replied that contracted volumes of piped natural gas were revised annually, and had been gradually declining because of depleting supplies from Indonesian gas fields.

That same year, Sengkang GRC MP Louis Chua asked about the terms and expiry dates of Singapore’s gas supply contracts with Indonesia.

Gan declined to disclose the details owing to commercial sensitivities, but said Singapore would safeguard its energy security by diversifying its sources of natural gas, including through LNG imports from other countries, it pointed out.

The party also said its MPs had filed haze-related questions for the upcoming parliamentary sitting and would follow up with supplementary questions where appropriate.

It would also continue to speak on energy and economic policies in Parliament.