E. Kalimantan fertilizer maker to cut gas supply to help its Aceh peer

East Kalimantan fertilizer maker PT. Pupuk Kaltim (PKT) will give 10 percent of its gas requirement for this year, or equal to three cargoes of LNG to help dying Aceh fertilizer maker PT. Pupuk Iskandar Muda (PIM) to get its gas supply, BPMIGAS chairman Kardaya Warnika said on Friday.

?Under the swap mechanism, gas supply to PKT will be reduced and turned into three LNG cargoes, which will be sent to Arun NGL customers. Arun NGL will then cut its LNG production by the same amount and pipe the spare gas to PIM,? said Kardaya.

Kardaya said that the mechanism would be able to temporarily avoid PIM from stopping production due to gas unavailability.

Kardaya, however, said that the plant was not yet final as discussions and approvals are still needed to make the plan working.

PIM is scrambling to get gas supply, as its contract with Aceh gas producer ExxonMobil Oil Indonesia (EMOI) had expired and the US firm has no spare reserves to be allocated to the fertilizer firm. EMOI?s gas fields in Aceh are operating on declining mode due to reserves depletion and only adequate to meet existing LNG supply contract. EMOI, a subsidiary of US giant ExxonMobil Corp. is the sole gas supplier to Arun NGL. (godang)