Asean power grid gains momentum

Indonesia and Singapore companies concluded a US$9 billion gas-sales agreement yesterday, adding momentum to a long-standing drive to establish a region-wide gas-supply grid.

The project ranks among the largest signed by Jakarta since the regional financial crisis of 1997-1998 and offers a much-needed source of hard currency to bolster the country's fragile recovery.

Indonesia's Energy and Mines Minister Purnomo Yusgiantoro said officials were also studying the feasibility of an integrated electricity network linking the 10 states of the Association of Southeast Asian Nations (Asean).

Under the terms of yesterday's deal, a 500-kilometre pipeline will be built across Jambi, Riau and South Sumatra provinces into Singapore, for the sale of 2.27 trillion cubic feet of natural gas. First deliveries are expected by mid-2003.

Mr Purnomo said: 'The new pipeline from Sumatra will provide a second physical link between Indonesia and Singapore, and represents a key ingredient in the longer-term goal of establishing the Asean gas pipeline, connecting Indonesia to other Asean members, providing access to new international markets.'

Last month, Indonesia - already the world's largest exporter of liquified natural gas - started natural gas deliveries worth US$8.5 billion to Singapore through a pipeline from its West Natuna Sea fields.