(EnergyAsia, April 16, Wednesday) — Singapore’s Sembcorp Industries said subsidiary Sembcorp Gas has signed an agreement to import 90 billion British thermal units (Btu) per day of natural gas from Indonesia.

Sembcorp Gas signed the conditional US$5.5 billion agreement with producers Premier Oil, KUFPEC, Hess and Petronas for the supply and delivery of natural gas piped from Indonesia’s Natuna Sea Block A. The block is operated by Premier Oil.

Sembcorp said this additional gas intake is primarily intended for the production of steam to meet growing demand in Jurong Island. The gas will also be used to support new chemical and petrochemical investments on the island.

The gas will be transported into Singapore through the existing gas pipeline system from the West Natuna Sea to Sembcorp’s receiving terminal located at the island’s Sakra sector.

The agreement becomes effective when the agreements to transport this additional volume of gas through the existing gas pipeline system within Indonesian waters are concluded, likely to be the third quarter.

Tang Kin Fei, President and CEO of Sembcorp Industries and chairman of Sembcorp Gas, said:

“The import of additional gas will allow us to meet growing customer needs on Jurong Island and it will enlarge our earnings base and provide the platform for the future growth of our energy and centralised utilities business.

“The conclusion of this second agreement reinforces Sembcorp’s position as a lead gas player in Singapore and will further enhance Sembcorp’s competitive position for the supply of steam for new demand in Jurong Island. Gas delivery is targeted to commence sometime between 2010 and 2011.

“Together with the gas contracted under the gas sales agreement signed in 1999, Sembcorp will be importing about 470 billion Btu of gas daily. Worldwide, Sembcorp operates more than 3,300 megawatts power generation capacity through power plants located in Singapore, Vietnam, Fujairah in the UAE, and the UK.”

Meanwhile, Premier Oil announced that it had signed two other sales agreements for the gas from the West Natuna Sea block.

The contracts are with Indonesia’s PT Pelayanan Listrik Nasional Batam (PLN) and PT Universal Batam Energy (UBE) for a total volume of 35 billion Btu per day. Together with SembCorp, the companies will have options to purchase an additional total of 13 billion Btu.

Premier said the contracts are “life of field” contracts and deliveries are expected to commence from the Gajah Baru field on West Natuna Sea Block A, offshore Indonesia in 2010.

Premier (28.67%) operates Natuna Sea Block A on behalf of its partners, KUFPEC (33.33%), Hess (23%) and Petronas (15%).