Construction of PIM?s second plant remains uncertain

The plan to construct a second fertilizer plant within the industrial compound of the state owned fertilizer producer PT Pupuk Iskandar Muda (PIM) in North Aceh remains uncertain due to the lack of data on the gas deposits in the area, Bisnis Indonesia reported on Tuesday.

Zaenal Soedjais, the president of PT Pupuk Sriwijaya (PIM?s parent company), said that the government should soon decide the fate of the US$310 million fertilizer plant so that the loss due to the delay of the project could be reduced.

?The government should decide whether to continue the construction of the fertilizer in Lhokseumawe, Aceh, or in Palembang, South Sumatera,? he was quoted as saying by the daily.

He, however, acknowledged that the lack of information regarding the availability of natural gas reserves in Lhokseumawe remained a major problem for the construction of the fertilizer plant in the Aceh province.

According to him, the construction of the second fertilizer plant should be backed by significant reserves which could last for 25 years. The available data on the gas deposits is confusing. Some say the reserves could last four 10 years, and the other 15 years.

PT PIM relies its gas supply from PT ExxonMobil Oil Indonesia, which has since early March stopped operation due to security concerns. The gas company also supplies PT Asean Fertilizer in addition to Pertamina?s Arun LNG plant. (*)