‘Keep calm and carry on’: Indonesia gas cut unlikely to hit Singapore electricity prices, says Tan See Leng
Global gas prices are a bigger factor in costs, says Minister for Energy, Trade and Industry (Energy and Industry) Tan See Leng.
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SINGAPORE: Electricity prices in the short term are unlikely to be affected by Indonesia cutting natural gas exports to Singapore, said Minister for Energy, Trade and Industry (Energy and Industry) Tan See Leng on Sunday (Oct 25).
Speaking to reporters after the People’s Action Party (PAP) conference, Dr Tan reiterated that the reduction amounts to less than 2 per cent of Singapore’s total daily gas needs. Singapore has sufficient gas supply to meet its demand, he said.
"In the short term, the prices would not really affect that much. 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 index itself," he added.
"We have always looked at energy as a very critical part of our entire country's economy, sustainability, and also our survival. Energy is existential for all of us, so we have put in place contingency measures, insurance measures, to ensure that our energy supply is diversified."
Indonesia on Saturday began reducing natural gas exports to Singapore to divert more supplies to domestic electricity needs.
An Energy Market Authority (EMA) spokesperson said on Saturday the total reduction of 31 million standard cubic feet of gas a day amounts to 17 British thermal units per day over a period of 18 days.
Dr Tan said that Singapore has multiple layers of defence in place, including diversifying sources of natural gas, maintaining its standby liquefied natural gas (LNG) facility, and ensuring that Singapore GasCo is ready to import more LNG whenever required.
Singapore's power generation companies are required to maintain sufficient diesel reserves to guard against a larger disruption of gas supplies.
"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.
Beyond gas, Singapore is also exploring alternative energy sources, including biomethane, geothermal and solar. It is also studying the possible use of nuclear energy, although no decision has been made on that yet.
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Prime Minister Lawrence Wong said at the conference on Sunday that Singapore expects all parties who have signed commercial gas contracts to “honour their commitments”.
He added that Singapore’s gas importer will take the necessary steps to protect its rights and interests.
Dr Tan added that the authorities will leave it to Gas Supply Private Limited (GSPL), a wholly-owned subsidiary of Temasek and Singapore's gas importer, to "look and closely examine" what remedies are present in the commercial contracts that they have entered into.
"From the government's perspective, in terms of building the reputation, the trust, I think this honouring of contracts ... is the base," he said.
Singapore imports natural gas through pipelines from Indonesia and Malaysia, as well as LNG shipped in from international suppliers. In 2025, piped natural gas accounted for 43 per cent of Singapore's total gas imports, while LNG made up the remaining 57 per cent.
Asked by CNA if the government felt that the reduction was a direct response from Indonesia to comments by Singapore's leaders about the haze and whether Singaporeans should be worried, Dr Tan noted that Indonesia had curtailed gas exports before.
"In fact, I think this year they also curtailed before this particular ... episode. But I think that was due to repairs in the pipelines, and they were making some maintenance work and so on," he said.
"Whether they chose to curtail the gas so close to the eve of our Singapore International Energy Week, I think that is a decision that ... they take on their own. So I'm not in any position to comment on that."
When asked by CNA if there were other factors at play besides what Indonesia has cited as the reason for the supply cut, and how Singapore will handle these other factors, Dr Tan reiterated that both countries have very good relations at the highest level of government, particularly between President Prabowo Subianto and Mr Wong.
This was built through "many, many decades of very good, solid partnerships", added Dr Tan.
"We understand that they may have some domestic supply needs and bottlenecks, which we can understand," he said.
"The exact details moving forward, I think these are still early days, and we will continue to monitor the situation very closely."
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