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Indonesia's Coordinating Minister for Downstream and Energy Transition, Bahlil Lahadalia, has stated that Jakarta could review energy export agreements with countries that failed to show mutual respect. While no specific nations were named, the statement has sparked questions over the implications should Indonesia halt gas exports to neighboring Singapore and Malaysia.
The Situation for Malaysia
While Malaysia historically imported natural gas from Indonesia, those volumes have fallen sharply. In contrast, Malaysia exported 27 million tonnes of liquefied natural gas (LNG) in 2025. If Singapore required replacement supplies, Malaysia could potentially sell additional gas, provided it maintains sufficient spare domestic capacity.
Singapore's Diversified Energy Supply
Natural gas accounts for 95% of Singapore's electricity generation. Last year, Indonesia delivered 3.22 million tonnes of gas to Singapore, an exchange valued at approximately US$1.66 billion.
Despite this reliance, about 57% of Singapore's gas supply already arrives by sea from international suppliers. Singapore has the financial resources to purchase replacement fuel from global markets if needed, even at higher costs, and existing supply contracts with Indonesia remain active until late 2028.
Domestic Value Versus Export Revenue
Halting pipeline gas exports presents trade-offs for Indonesia. While stopping exports risks the loss of substantial foreign revenue, retaining the fuel domestically could power local industries and manufacturing. The broader economic question centers on whether Indonesia generates greater value from domestic utilization or through overseas exports.
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