ExxonMobil agrees to supply gas to Aceh fertilizer firm

American energy firm ExxonMobil has agreed to supply natural gas to fertilizer firm PT Pupuk Iskandar Muda (PIM) to keep the firm in operation.

Head of oil and gas authority BP Migas Kardaya Warnika said ExxonMobil had agreed to supply an equivalent of one cargo of liquefied natural gas (LNG) to the fertilizer firm, which will be delivered at the flow rate of 60 million cubic feet per day.

In return, PIM has to buy one cargo of LNG from the spot market to be delivered to the costumer of LNG producer PT Arun NGL Co ?after August till the end of this year?.

ExxonMobil has to cut gas supplies to Arun as a result of its decision to supply gas to PIM. ExxonMobil is the sole gas producer in Aceh. In the past, the firm had enough gas reserves to supply both Arun and fertilizer firms in the province. However, following the decline in gas reserves, ExxonMobil has to stop supplies to PIM to maintain supplies to Arun, which has contracts to supply LNG to South Korea and Japan.

PIM earlier said its gas stocks were only enough to keep its plant in operation until Friday.

Kardaya said PIM will have to buy one cargo of LNG at international price. The price now stands at $7.5 per million British thermal unit.

Kardaya further said Arun had enough LNG for the July and August shipments to its customers.

However, there would be shortages of LNG cargoes for September and October shipments, he said, without elaborating the amount of the shortage. (Alex)