Sembcorp Industries’ U96 wholly-owned subsidiary, Sembcorp Gas, has signed a gas sales agreement (GSA) with Medco E&P Natuna Ltd, a wholly-owned subsidiary of PT Medco Energi Internasional Tbk (MEDC), to import natural gas piped from Indonesia’s West Natuna gas fields at an estimated value of $1.9 billion.
The GSA is expected to be effective by 2H2023, conditional upon the necessary agreements to transport the new supply of gas. Delivery is expected to commence from 2024 for a tenure of four years, says Sembcorp in a Singapore Exchange (SGX) filing on June 5.
“The GSA supplements Sembcorp’s existing natural gas supply from piped and liquified sources, allowing it to maintain its position as Singapore’s leading natural gas importer,” says Sembcorp.
Sembcorp is Singapore's first commercial importer and retailer of natural gas. According to Sembcorp’s website, the group brings in 431 billion British thermal units of natural gas per day from West Natuna. This gas is supplied to major power generation and petrochemical companies.
The signing of the GSA is in the ordinary course of business of Sembcorp and its performance is not expected to have a material impact on the earnings per share and net tangible assets per share of Sembcorp for the financial year ending December 31, 2023.
Shares in Sembcorp Industries closed 16 cents higher, or 3.08% up, at $5.35 on June 5.
