S'pore electricity prices would not be affected much in short term: Tan See Leng on Indonesia gas export cut

Minister for Energy, Trade and Industry (Energy and Industry), Tan See Leng, said that Indonesia's gas export cut will have little effect on electricity prices in Singapore at a doorstop on Oct. 25.

According to the Energy Market Authority, Indonesia's total reduction amounts to 17 billion British thermal units per day (BBTUD) over 18 days.

Responding to questions fielded by the media, Tan said that Singapore uses about 1 trillion BBTUD for power generation and around 1.35 trillion BBTUD in total.

"So this 17 billion BBTU is actually less than 2 per cent of our needs. So I think in the short term, the prices would not really affect that much."

Tan added: "In fact, if anything at all, we should be looking at the world prices because a lot of our gas, the unit price is actually pegged to the movement of some of the key global indexes."

Will pursue commercial remedies if there's any contract breach

Tan elaborated on the reduction of natural gas supplies from Indonesia, stating that Singapore's "gas supplies are covered by commercial contracts between our gas importer, which is Gas Supply Private Limited or GSPL for short, and its Indonesian suppliers".

"Now we expect the contracts to be honoured. GSPL will engage its suppliers to determine if there is a breach of contract, and if so, to pursue the commercial remedies which are provided for in the contracts."

"I want to reassure and assure all Singaporeans that we have sufficient gas supply to meet our demand", Tan emphasised.

"We have sufficient replacement gas from other sources, and this includes liquefied natural gas or LNG."

Singapore's energy security has "multiple layers of defence in place", Tan said, including a standby LNG facility and the maintenance of sufficient diesel reserves.

"In the medium term, we are building a second LNG terminal and diversifying our energy mix."

When asked about contract renewals with Indonesia moving forward, Tan said Singapore is in the "open season", a phase of the energy market where bidding for contracts occurs.

"Any renewal of the PNG (piped natural gas)  from our neighbouring countries would, of course, depend on what are the commercial terms offered, how long those contracts are, and, of course, the reliability of those contracts entered into, the track record of whether they have been able to honour every single one of the commitments."

Diversifying our energy sources

Tan noted that the government has always looked at energy as a critical part of Singapore's economy, sustainability and survival and contingency and insurance measures have been put in place to ensure diversification of the energy supply.

Beyond gas, Tan said the government was looking into and exploring renewable energy sources, including domestic solarisation, biomethane and geothermal energy.

Emphasising that the government has yet to make a decision, Tan cited nuclear energy as an option, specifically small modular reactors.

Tan added that he would elaborate more on "the entire diaspora of all energy sources" Singapore could "tap into" and its five-year plan in his lecture on Oct. 26 at the start of the Singapore International Energy Week.