East Java?s paper, fodder industries suspend production due to gas shortage

Paper and fodder industries in East Java have suspended their production activities for four days due to gas supply shortage, Bisnis Indonesia daily reported on Monday.

Publicly listed paper maker PT Surabaya Agung Industry Paper Tbk suspended production for four days last week following a decline in gas supply from state gas distributor PT PGN. PT Surabaya had so far received 7 million cubic meters of gas from PGN monthly based on two-year contracts.

Paper production of PT Surabaya, which used the gas for its power generators, was estimated to drop by 2,000 tons due to the 4-day production disruption. A significant portion of the company?s products were for exports, company manager Ani Indrawati told Bisnis Indonesia on Saturday.

Meanwhile, fodder maker PT Choil Samsung Indonesia had also suspended its operation for around four days last week. It had received 4.5 million cubic meters of gas from PGN monthly.

?We could no longer operate machines at our factory,? said PT Choil?s executive Sam Jae Lee. The company operates a fodder plant in Pasuruan, east of Surabaya.

Gas supply shortage had occurred in East Java due to a drop in gas production in BP Indonesia?s Pagerungan field. Pagerungan is part of Kangean Block, also in East Java. It supplies gas to East Java through PGN.

Gas production from Pagerungan had dropped to between 300 million cubic feet per day (MMCFD) to 240 MMCFD causing serious shortage of gas supply for East Java?s households and industrial users.

BP had been given exclusive rights to supply gas to East Java from its Kangean block. (*)