[SINGAPORE] Shares of energy and urban solutions provider Sembcorp dropped on Friday (Mar 14) morning after a deal inked by one of its subsidiaries to import natural gas from Indonesia fell through.
At 10.11 am, the counter fell by 4.9 per cent or S$0.30 to an intraday low of S$5.79, with 3.1 million securities changing hands. The last time it traded at such levels was February 2024.
Shares of Sembcorp last closed 0.7 per cent or S$0.04 higher at S$6.09 on Thursday, before the news.
After the midday trading break, the share price eased back up to S$5.85 as at 1.03 pm, still down by 3.9 per cent or S$0.24 with 4.1 million securities transacted.
News broke on Thursday that the deal inked by Sembcorp’s wholly owned subsidiary, Sembcorp Gas, to import natural gas from Indonesia fell through due to the failure to obtain regulatory approval.
Sembcorp Gas signed the deal, announced in September 2023, to import up to 111 billion British thermal units per day of piped natural gas from the Mako gas fields in Indonesia, with West Natuna Exploration, Empyrean Energy and Coro Energy Duyung (Singapore).
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Had the deal gone through, gas delivery was expected to start from 2026, for a tenure of about 11 years.
Sembcorp said on Thursday: “The gas sales agreement was subject to regulatory approvals as a condition precedent. As regulatory approval in Indonesia has not been obtained, the gas sales agreement will accordingly be terminated.”
The company said that the deal’s termination would not affect its energy costs or ability to meet gas supply requirements in Singapore, as it would continue to fulfil demand by leveraging its network of natural gas sources, including liquefied natural gas.
The news is not expected to have a material impact on Sembcorp’s earnings per share and net tangible assets per share for the financial year ending Dec 31, 2025, it added.
In June 2023, Sembcorp Gas also signed a S$1.9 billion sales agreement with Medco E&P Natuna to import natural gas from the West Natuna gas fields in Indonesia. The deal was to supplement its existing natural gas supply from piped and liquefied sources, the company said.
