Fresh supply to be used to fuel cogen plant, meet Jurong Island demand
Ronnie Lim, Business Times 5 Apr 08;
SEMBCORP Industries looks set to conclude its deal to buy more Indonesian natural gas this month. The gas will be used to fuel its cogeneration plant as well as meet growing gas demand from petrochemical plants on Jurong Island.
This follows an earlier heads of agreement it reached with Premier Oil Indonesia last November to import an additional 90 billion British Thermal Units (BBtu) per day of gas from the Natuna Sea Block A field, which Premier operates.
The 26 per cent increase in gas will 'augment the 341 BBtu per day which SembCorp contracted for in 1999, supplied by the West Natuna Group of which Premier Oil is a member', the Singapore corporation said then.
The additional gas will primarily be used by its 815 MW cogeneration plant 'for process use and production of steam to meet growing demand by petrochemical industries on Jurong Island'.
'Some quantity of gas is also expected to be consumed by industrial and chemical customers.'
The Singapore group said at that time that the two sides had been in discussions since 2004 and that it expected to conclude the latest gas deal by the first quarter of this year.
Jakarta reports yesterday suggest that the new 15-year gas deal is expected to be signed soon, as the two sides are very close to concluding negotiations on the volume and price.
Indonesia will start exporting the additional gas to Singapore in 2011, should the contract be signed later this month, The Jakarta Post quoted an official from BP Migas, the country's oil and gas regulator, as saying.
BP Migas deputy chairman Eddy Purwanto reportedly said that the deal would replace the previous export contract which was terminated because Singapore failed to meet Indonesia's requirements.
He was apparently referring to BP Migas's cancellation last October of Island Power's deal to buy Indonesian gas from ConocoPhillips's gas field in Sumatra for its planned Singapore power station.
The axe came after several warnings by BP Migas that it would cancel the deal if the US-owned Island Power failed to secure gas transportation rights through the Singapore section of the existing Singapore-Sumatra pipeline. Island has, meanwhile, turned to the Energy Market Authority here to help it resolve this issue.
Under the expected SembCorp-Premier Oil deal this month, Indonesia will pipe the gas from the Gajah Baru field in Natuna to Singapore via the existing Natuna-Singapore pipeline.
