Singapore gas line ‘still a high priority’

Jakarta remains committed because Natuna project will bring investments and revenue, says minister Bambang.

INDONESIA’s new Mines and Energy Minister Bambang Yudhoyono said yesterday that Jakarta remains committed to an agreement that will channel natural gas from the Natuna Islands to Singapore.

He told The Straits Times that the project to build a 640-km pipeline from the West Natuna gas field and provide Singapore with 325 million standard cubic feet of natural gas daily for 22 years, was still “a high priority” given the economic benefits. “One of the main concerns of the new government is to attract foreign investments and generate revenue and we get that in the Natuna project,” he said.

He said the key issue was whether the pipeline should go straight to Singapore or pass Batam, Indonesia’s industrial showcase, and added that the whole process should be “very transparent” given the need to build investor confidence. His comments came amid recent reports that state-owned oil company Pertamina was planning to re-tender the gas pipeline project.

US-based McDermott Corporation – together with prominent businessman Bob Hasan – was said to be the front-runner for the tender, by virtue of it tabling the lowest bid.

But the tender came under fire from Indonesian legislators who alleged that it had been rigged.

Lt-Gen Bambang disclosed that he had briefed senior officials in Pertamina on the need to rid the agency of “inefficiencies” after an audit by PricewaterhouseCoopers.

The Natuna gas deal, signed in January this year by Economic Development Board chairman Philip Yeo and former Mines and Energy Minister Kuntoro Mangkusubroto, is expected to generate revenues of US$8 billion (S$12.8 billion) for Indonesia over two decades, or US$1 million a day.

Lt-Gen Bambang said he would be visiting Singapore soon to touch base with his counterparts and explore areas of joint cooperation in the oil, gas and mining sectors, adding that he had “many friends in Singapore”.

Singapore businessmen said that the minister would have little difficulty finding investors in the Republic to put their money back into Indonesia.

Noted a Singapore investor here: “The new Mines and Energy Minister is himself a boost to investor confidence because he comes with an untainted reputation. But his challenge will be to convince businessmen that they will be protected by the rule of the law.”

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