Indonesia signals gas export curbs amid haze tensions
Coordinating Minister Bahlil Lahadalia stated on 22 October that Jakarta could halt supplies to countries not showing “respect,” citing domestic needs and a shift from earlier assurances on quotas.
Indonesia to review energy export contracts
Indonesia's Coordinating Minister for Downstreaming and Energy Transition, Bahlil Lahadalia, announced on 22 October that the nation plans to re-evaluate its energy export agreements. He indicated a willingness to consider stopping supplies to countries that do not demonstrate “respect” for Indonesia.
This statement followed President Prabowo Subianto's address at a cabinet meeting on 21 October, where he emphasised the importance of protecting Indonesia's natural resources and prioritising domestic needs. Minister Lahadalia, who also serves as Minister of Energy and Mineral Resources, did not name any specific countries.
Policy shift and regional tensions
Minister Lahadalia linked the potential export curbs to a broader directive to use natural resources primarily for internal consumption, describing it as a “survival mode” approach. He further suggested that Indonesia might not renew existing gas export contracts with neighbouring nations, citing increased domestic demand.
This marks a shift from five months ago, when Lahadalia had assured oil and gas producers that export quotas, including those for overseas buyers, would not be reduced in 2026. The announcement occurs amid heightened tensions with Singapore and Malaysia over haze from fires in Sumatra and Kalimantan.
Singapore's energy reliance and diversification
Singapore, which generates approximately 95% of its electricity from natural gas, largely imports Indonesian gas via pipelines under contracts set to expire by the end of 2028. In response to the haze issue, Singapore has issued legal notices to 10 Indonesian companies suspected of contributing to the fires.
The Singapore Exchange (SGX) has also questioned seven listed agricultural companies regarding potential links to the blazes. Singapore has been actively working to reduce its dependence on piped gas, with liquefied natural gas (LNG) accounting for more than half of its gas imports in 2024, and a second LNG terminal currently under construction.
The potential review and non-renewal of gas export contracts could lead to supply uncertainties for regional importers, particularly Singapore and Malaysia. This policy shift may accelerate diversification efforts among Southeast Asian economies to secure alternative energy sources and strengthen domestic energy security measures.
Companies involved in energy trading, infrastructure development, and gas-dependent industries across Asia should monitor these developments closely, especially as existing contracts approach their expiry dates and new supply agreements are negotiated.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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