LNG traded by Singapore-based firms usually does not physically pass through Singapore, says METI

SINGAPORE: Liquefied natural gas (LNG) traded by Singapore-based companies is usually shipped directly from its source country to its destination without physically passing through Singapore, the Ministry of Energy, Trade and Industry (METI) said on Friday (Oct 30).

The clarification follows remarks by Indonesian Energy and Mineral Resources Minister Bahlil Lahadalia, who suggested that some LNG shipped from Indonesia to Singapore was subsequently resold to other countries rather than used for domestic consumption, according to local media reports. 

Speaking to reporters on Thursday after a meeting with President Prabowo Subianto in Jakarta, Mr Bahlil said Indonesia had shipped 148 LNG cargoes to Singapore. He did not specify the period over which the cargoes were shipped.

He said he believed some of these cargoes were likely resold to other countries, with the rest used to meet Singapore's domestic demand, local media Jakarta Globe and Antara reported. 

Mr Bahlil did not provide evidence identifying specific shipments that had been re-exported, Jakarta Globe reported. 

A METI spokesperson on Friday noted that Singapore is an international trading hub, including for LNG.

More than 50 Singapore-based companies buy, market and trade LNG sources from markets globally, including Indonesia, the ministry said, adding that top source markets for these companies include the US, Australia, and Malaysia.

“While Singapore-based traders make the commercial decisions relating to the cargo, the actual LNG cargo usually moves from source to destination country directly and does not physically pass through Singapore,” METI told CNA.

“Piped natural gas imported from Indonesia is for domestic use, and not for export.”

Indonesia began reducing piped natural gas exports to Singapore on Oct 24, with supplies diverted to meet domestic energy needs.

Singapore's Energy Market Authority (EMA) said the reduction amounted to about 17 billion British thermal units per day over 18 days, representing less than 2 per cent of Singapore's daily gas demand.

Prime Minister Lawrence Wong said on Oct 25 that Singapore expected all parties to honour their commitments under commercial contracts.

Mr Bahlil on Thursday defended Indonesia's decision, saying the reduction remained within the minimum supply limits stipulated in existing agreements.

He said Indonesia had not breached its contractual obligations.