AAF and PIM await gas supply from Block A area

Aceh-fertilizer producers PT Pupuk Iskandar Muda and PT Asean Aceh Fertilizer are waiting the realization of the government's plan to expand gas production into the Block A gas concession area in the troubled Aceh province, Bisnis Indonesia reported on Tuesday.

The development of the Block A gas area is vital for the future operation of the two fertilizer companies because the current production of the existing Arun gas block is only enough to meet the export commitment of the liquefied natural gas producer Arun LNG Plant located in the province.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro, however, said that the planned development of the Block A gas area had not been decided, saying that the government was still assessing the possible incentives to be given to its developers ConocoPhillips and ExxonMobil to develop the gas block.

"Unlike, the Arun gas field, the development of the Block A area would be much costly. The government should therefore should provide incentives to them," Purnomo said.

ExxonMobil recently stopped its gas supply to the two fertilizer companies due to the decline in its gas reserves. The company has later resumed the gas supply but the gas received by the two fertilizer producers is far from enough to meet their production capacity. (*)