Fertilizer firm to get new gas supply for 15 years

A number of gas producers in East Kalimantan have signalled they are ready to supply 80 million cubic feet per day (MMCFD) of natural gas over a period of 15 years for a new production unit to be built by state-owned fertilizer company PT Pupuk Kalimantan Timur (Pupuk Kaltim).

President Director Hidayat Nyakman was quoted by Bisnis Indonesia as saying in Jakarta on Wednesday that the supply commitment would account for about 90 percent of the gas requirement for the company?s fifth fertilizer plant.

Prices of the gas would be based the average price of crude oil, ammoniac and natural gas in international market, he said, without naming the gas producers that will supply the gas.

He said that the company would need about US$870 to build the new plant which would replace the company?s aging first plant. About 70 percent of the total funds needed for the plant construction would be provided by banks and the remaining 30 percent from the company?s own funds.

The firm will soon negotiate with national banks for the loan, while talking with the gas producers over the gas supply, he said.

The new plant will produce about 2,500 tons of ammonia per day and about 1.2 million tons of urea per year. The total production will be about 70 percent higher than that of the first plant. (*)