VZCZCXRO0728
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #1669 2500905
ZNR UUUUU ZZH
R 070905Z SEP 07
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 3955
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SINGAPORE 001669 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR FOR AUSTR WEISEL AND DAUSTR BELL 
 
E.O. 12958: N/A 
TAGS: ENRG EPET EINV ETRD ECON SN
SUBJECT: ISLAND POWER'S CONTINUING PIPELINE ACCESS WOES 
 
REF: A. SINGAPORE 1583 
 
     ¶B. SINGAPORE 1167 
     ¶C. SINGAPORE 996 
 
¶1.  (SBU) Summary: Island Power, the local subsidiary of U.S. 
company Intergen, is increasingly pessimistic that it will 
gain full access to Singapore's electricity market.  Although 
Singapore's amended Gas Act to liberalize the energy sector 
took effect in June, Island Power finds itself squeezed 
between bureaucratic foot dragging in Singapore and a 
beleaguered gas supply contract in Indonesia (ref B). End 
summary. 
 
¶2.  (SBU) Singapore's Energy Market Authority (EMA) is still 
reviewing Island Power's recently submitted application for 
pipeline access, but the process is a "pedantic nightmare 
with no end in sight," according to a company representative. 
 He told us that EMA is "doing all the right things" under 
the amended Gas Act, but at a "glacial pace."  He attributes 
the problem to EMA's lack of experience with this process and 
its perceived need to proceed with utmost caution. 
 
Indonesian Gas Contract Not Dead -- Yet 
--------------------------------------- 
 
¶3.  (SBU) Despite recent press reports to the contrary, 
Island Power's gas supply contract with Indonesia is still 
valid, according to the representative.  However, the 
situation is "extremely serious" and the GOI is becoming more 
aggressive in its insistence that Island Power complete the 
pipeline access agreement soon.  If Indonesia formally 
cancels the contract, Island Power's application with EMA 
will be void.  The likely result is that the company will 
lose all of the US$70 million it has invested in the power 
station project so far, he stated. 
 
Other Access Barriers 
--------------------- 
 
¶4.  (SBU) The managing director of a Singapore 
government-linked power company recently told us that Island 
Power stood a slim chance of gaining access to the pipeline, 
regardless of EMA's decision.  Even if the application is 
approved, other industry players involved will "utilize every 
option at their disposals to foil Island Power's plans," he 
claimed. 
 
Visit Embassy Singapore's Classified website: 
http://www.state.sgov.gov/p/eap/singapore/ind ex.cfm 
HERBOLD