Indonesia has defended its recent cuts to natural gas exports to Singapore, asserting that the reductions do not violate existing contracts. Energy and Mineral Resources Minister Bahlil Lahadalia stated that the country had reduced piped gas exports by 31 million standard cubic feet per day, or about 8% of the 409.55 million supplied through pipelines from the Natuna Sea and mainland Sumatra. He emphasized that the cuts remained within the minimum limits allowed under current agreements, noting that a 10% reduction would have breached the contract.
The minister attributed the reduction to maintenance-related shutdowns and increased domestic demand, particularly for electricity in Batam, Bintan, and Sumatra. He also hinted at the possibility of invoking force majeure, a contractual provision that could excuse Indonesia from fulfilling its obligations under certain circumstances, though he did not confirm its invocation. Singapore, meanwhile, has expressed concerns, with Prime Minister Lawrence Wong urging all parties to honor their contractual commitments.
The cuts come amid ongoing negotiations between the two countries for electricity exports from Indonesia to Singapore, with pricing differences still unresolved. Additionally, Indonesia is considering building a nuclear power plant in the Riau Islands, potentially in Batam, as part of efforts to strengthen domestic energy security. The government is studying several locations, including Halmahera, Kalimantan, and Sumatra, with cooperation from Russia being explored for a proposed plant in Halmahera.
Indonesia’s existing gas supply contracts with Singapore run until the end of 2028. The reductions have raised concerns about resource nationalism, which could deter energy investments, as Singapore unveiled a five-year plan to expand its energy infrastructure to meet rising demand.