Commodities
Indonesia cuts pipeline gas to Singapore to shore up power at home, as Singapore says the gap is under 2% of demand
Jakarta is diverting 31 million standard cubic feet a day to power plants in Batam, Bintan and Sumatra, sharpening questions over supply contracts that expire at the end of 2028.
HedgeWeekly News Desk ·
Indonesia began reducing pipeline gas exports to Singapore on Saturday, October 24, redirecting the fuel to domestic electricity generation. Djoko Siswanto, head of upstream regulator SKK Migas, said the cut totals 31 million standard cubic feet a day, with 15 million coming from the Natuna field and 16 million from Sumatra. The gas will instead supply power plants in Batam, Bintan and Sumatra, where a 16-hour blackout hit Batam and several Riau Islands cities earlier this month.
The move follows a week of tougher language from Energy Minister Bahlil Lahadalia, who said he would put domestic energy needs first and review export contracts, and on October 22 said Indonesia could stop selling gas to countries that do not respect it, without naming any. Bahlil has said Indonesia exports about 30% of its gas output and that the government will recalculate that share. Djoko said no other country would face a similar adjustment because the pipelines run only to Singapore.
Singapore's Energy Market Authority played down the impact, putting the reduction at 17 billion British thermal units a day over 18 days, or less than 2% of daily gas demand of more than 1,000 bbtud. The regulator said importers would pursue contractual recourse, that state buyer GasCo stood ready to bring in more liquefied natural gas, and that national supplies were sufficient. Singapore generates up to 95% of its electricity from natural gas, and its piped-gas importers include GSPL, Keppel Gas, SembCorp Gas and Senoko Energy.
For investors in Asian energy and utilities, the bigger question is 2028. Singapore's deputy prime minister told parliament in September 2025 that Indonesian pipeline contracts expire at the end of that year and that rising demand in Indonesia could limit exports, and SKK Migas has studied a moratorium on pipeline sales once the contracts lapse. Any shortfall would push Singapore further toward LNG imports, a market already unsettled by attacks on Gulf energy infrastructure. Watch for how Jakarta resets its export share, whether importers' contractual claims progress, and the stalled talks on cross-border electricity trade, where Bahlil said on October 19 that pricing was still unresolved.