ExxonMobil in dispute with Pertamina over Arun NGL
Thursday, July 30 2015 - 02:01 AM WIB
Directorate General of State Asset (DJKN) at Ministry of Finance has finally extended the operating license of PT Arun NGL in Lhokseumawe, Aceh for the fourth time until Sept. 30, 2015.
The license was extended because American firm ExxonMobil and state owned oil and gas firm PT Pertamina (Persero) as shareholders still disagree over the end of PT Arun?s operation. ExxonMobil, adhereing to the old contract, states PT Arun exists until 2018, while Pertamina says PT Arun has automatically ceased operation with the end of the LNG plant operation,
"We are discussing with ExxonMobil. Once an agreement has been reached, we shall go to the government for approval,? Vice President for Corporate Communications of Pertamina Wianda Pusponegoro told Petromindo.com.
Meanwhile, Public Relations Manager of PT Arun Hendra Afiat, was quoted by tribunnews.com as saying that the plant?s operating license of PT Arun was supposed to end on Dec. 31, 2014. But until today no agreement has been reached between ExxonMobil and Pertamina.
According to Hendra, currently there are two commercial companies operating in the same site, namely PT Arun and a new company called PT Perta Arun Gas (PAG), with two different activities: PT Arun delivers 6-7 mmbtu of gas per hour to fertilizer firm PT Pupuk Iskandar Muda (PIM) and for its internal needs, while, PAG, which was formed by Pertamina, through its subsidiary PT Pertagas, converts LNG brought from outside into gas and send the gas to North Sumatra.
"There has been an agreement, which is evinced by the signing of the SPA (sales purchasing agreement) by Pertamina and Exxon last month," President Director of PAG Teuku Khaidir told Petromindo.com.
According to him, the new extension of PT Arun?s license only aims to provide a period of transition.
An industrial source said that ExxonMobil will sell the gas to Pertamina so that the latter resell it to PIM.
Vice President of Public and Government Affairs of ExxonMobil Indonesia Erwin Maryoto told Petromindo.com that his company is still committed to working with Pertamina and the government to ensure gas delivery to the domestic market and development of the country's natural resources.
Following the shipment of last cargo from Arun LNG plant in October last year, Pertamina planned to cease the operation of PT Arun starting on Dec. 31, 2014. But DJKN extend the firm?s operating license until Jan. 31, 2015. It then extended the license again until March 2, 2015 and extended it for the third time until June 31, 2015.
Editing by Johannes Simbolon