Singapore and Indonesia have reaffirmed their commitment to honoring gas supply agreements despite Indonesia’s recent decision to reduce its natural gas exports to Singapore by 31 billion British thermal units per day (BBTUD). Singapore’s Foreign Minister Vivian Balakrishnan emphasized the importance of respecting contracts during his visit to Jakarta, highlighting that such commitments are vital to the credibility and competitiveness of both economies.
Indonesia’s reduction in gas exports is attributed to prioritizing its domestic energy requirements. The country has maintained that the reduction is within the allowable limits under existing agreements. Indonesia’s Energy Minister Bahlil Lahadalia defended the move, stating that the agreement permits supply cuts of up to 92 BBTUD, thereby rejecting criticisms from Singapore regarding the management of its contractual obligations.
Singapore’s Prime Minister Lawrence Wong has previously urged suppliers to fulfill their commitments and has indicated that Singapore might seek remedies if Indonesia is found to have breached commercial agreements. Balakrishnan noted that high-level communications have occurred between Singaporean and Indonesian leaders, including discussions with Indonesian President Prabowo Subianto, though specific details of these discussions were not disclosed.
Prior to the reduction, Indonesia supplied about 409.55 BBTUD of natural gas to Singapore through pipeline networks, alongside shipments of liquefied natural gas. The ongoing dialogue and commitment to existing contracts underscore the importance both nations place on maintaining stable economic relations despite the tensions arising from the export reduction.