Indonesia’s Gas Supply Cut Pressures Sembcorp as Deliveries Fall 17 BBTUD
Key Facts
Sembcorp Industries shares fell more than 5% to their lowest level since August 2026 after Indonesia cut pipeline gas supplies to Singapore, according to a report cited by The Business Times. The Energy Market Authority of Singapore said gas importers had informed it of a 17 BBTUD reduction over 18 days. That represents less than 2% of daily electricity-sector demand, according to a statement by Minister for Energy and Trade and Industry Tan See Leng. The cut puts Sembcorp Gas, which receives gas from the Natuna Sea, in investors’ focus. But the Singapore government said the country has sufficient supplies, limiting the development’s significance for overall supply security.
The data distinguish between the volume of cuts announced by Indonesia and the impact reported by importers in Singapore. The head of SKK Migas said that, starting Oct. 24, the cut amounted to 15 million standard cubic feet per day from Natuna supplies and 16 million from Sumatra. The Singapore figure, 17 BBTUD, describes the reduction reported by importers over 18 days, using a different unit of measurement. The figures therefore do not represent a single measure that can be added together or directly compared. Bloomberg said the cut was equivalent to about 14% of Indonesia’s average pipeline exports to Singapore in the previous year, based on Energy Ministry data and SKK Migas reports.
The recipient of the gas varies by source. Gas from the Natuna Sea travels through a direct subsea pipeline to a receiving facility operated by Sembcorp Gas, according to The Straits Times. Sumatra supplies, by contrast, go to Gas Supply. The newspaper said the supply agreements were expected to run through 2028. This means the flow reduction affects existing supply arrangements, with the operational links split between two Singapore companies and not limited to Sembcorp alone.
Tan said Singapore has enough gas to offset the cut from other sources, including liquefied natural gas. “We have sufficient alternative supplies from other sources, including liquefied natural gas,” he added in a ministry statement. The reassurance is consistent with the Energy Market Authority’s estimate that the reduction is less than 2% of daily electricity-sector demand. The government thus described the reported impact as limited relative to daily demand, while pointing to available alternatives. The statement puts the share move in the context of a company’s exposure to one supply route, rather than an announcement of a national gas shortage.
On contracts, Prime Minister Lawrence Wong said gas supplies are covered by commercial agreements and that Singapore expects all parties to meet their obligations. He added that the Singapore importer would take the necessary steps to protect its rights and interests under those contracts. “We expect all parties to meet their obligations, and the Singapore gas importer will take the necessary steps to protect its rights and interests under these contracts,” Wong said. This highlights the contractual dimension alongside the government’s assurance that alternative supplies are available. Sembcorp, for its part, said 80% of its contracted load is secured under contracts lasting five years or more, and that the performance of its gas and related services business through the first-half 2026 results was underpinned by this contractual position.
Singapore is also working to expand its capacity to import liquefied natural gas. The Energy Ministry said SLNG is developing a second LNG terminal to meet future demand. The terminal is intended to enable imports from more countries and reduce the risk of supply disruptions, the ministry said. The plan comes as the government maintains that alternatives are available for the current cut, while existing contracts point to Indonesian supplies being expected to continue through 2028. The available information did not include a specific completion date for the second terminal.