Sembcorp Industries Terminates Indonesia Gas Deal

Sembcorp Industries, a Singapore-based utilities company, has terminated a gas sales agreement (GSA) due to regulatory hurdles in Indonesia.

The GSA, which was supposed to import up to 111 billion British thermal units per day (Btu/d) of piped natural gas (PNG) from Indonesia’s Mako gas fields, failed to receive the approvals.

The gold standard of business intelligence.

Find out more

In September 2023, Sembcorp’s subsidiary, Sembcorp Gas, signed the GSA in partnership with three companies: West Natuna Exploration a subsidiary of Indonesia-based Conrad Asia; London-listed oil and gas explorer Empyrean Energy; and energy company Coro Energy Duyung.

The agreement was expected to become effective by the first half of 2025, pending a final investment decision for the Mako gas fields and the fulfilment of certain conditions including the necessary regulatory approvals and agreements.

Despite this setback, Sembcorp has stated that the termination of the GSA will not impact the company’s energy costs or its ability to meet gas supply requirements in Singapore.

The company plans to continue leveraging its network of natural gas sources to satisfy demand, including the use of liquefied natural gas (LNG).

In February 2024, Sembcorp Fuels signed a long-term sale and purchase agreement (SPA) with TotalEnergies for LNG supply, starting in 2027.

The 16-year agreement will provide Sembcorp with up to 800,000 tonnes per annum of LNG to support its operations.

Announcing the deal, Sembcorp said: “The SPA diversifies Sembcorp’s existing natural gas supply from piped and liquefied sources globally. As Singapore’s leading natural gas importer, Sembcorp is committed to supporting Singapore with a stable and resilient supply of energy in its transition towards a net-zero future.”