S’pore seals second gas deal with Indonesia

Some 150 million cu ft of natural gas to be imported daily through a 500-km pipeline from South Sumatra.

Singapore yesterday sealed a 20-year agreement with Indonesia to buy US$9 billion (S$15.7 billion) worth of gas from South Sumatra in a second multi-billion-dollar gas deal, marking yet another milestone in bilateral ties.

Under the pact, just weeks after both nations launched the West Natuna gas-transport system, Singapore will import 150 million standard cu ft of natural gas daily through a 500-km pipeline from the Asamera gas fields in South Sumatra.

The project is expected to generate revenues of up to US$7billion for Indonesia and create more than 3,000 jobs when fully operational by July 2003.

Speaking at the official signing ceremony here between Singapore Power and the Indonesian state oil company Pertamina, Mines and Energy Minister Purnomo Yusgiantoro said the deal would help the Indonesian economy recover from its worst downturn in a generation.

He told The Straits Times that Singapore had once again shown that it could play “a catalyst role” in bringing foreign investments into Indonesia.

“Both of us can work towards mutual benefit,” he said, adding that the Asamera project was “economically and politically symbolic” in forging ties.

Like the US$8 billion West Natuna gas deal, which supplies gas through a 640-km submarine pipeline, the new agreement represented another “physical link” with Singapore, and could pave the way for building a future trans-Asean gas pipeline. Singapore also stood to benefit. Singapore Power, which took three years to negotiate the deal, said it would help to meet the country’s growing demand for electricity.

Minister for Trade and Industry George Yeo, who witnessed the signing ceremony, in his speech said that cooperation between both countries had moved “another major step further”.

Both sides had earlier worked together to develop the Riau province, earning for Indonesia more than US$4 billion in investment commitments and export revenues of more than US$2.5 billion last year alone. Brigadier-General (NS) Yeo, who is leading a 40-member delegation on a four-day trip to Indonesia, told reporters later that Singapore’s ties with Jakarta were now on “an even keel”.

Asked to comment on President Abdurrahman Wahid’s recent criticism of Singapore, he said that it was no longer an issue. He said: “We are close neighbours and are bound by a million things. “There are bound to be problems … so long as there is mutual respect, I am sure all problems will be resolved.

“With this second deal, relations are on a long-term footing.

“It shows that both sides have long-term confidence in each other’s commitment to strengthen ties.”

Yesterday, BG Yeo also met Mr Abdurrahman, Vice-President Megawati Sukarnoputri and Parliamentary Speaker Akbar Tandjung.

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