Gas reserves for PIM-2 fertilizer plant enough only for 2004
Saturday, July 28 2001 - 02:48 AM WIB
Nevertheless, the government would find an alternative natural gas supply for PIM-2 fertilizer plant and therefore, it would continue the construction of the PIM-2 project, according to the director general of oil and gas at the Ministry of Energy and Mineral Resources, Rachmat Sudibyo.
Rachmat said that despite low gas reserves in Aceh, the government would find an alternative natural gas supplies to PIM-2 plant from other sources, most possibly from gas fields in Bontang, East Kalimantan, operated by TotalFinaElf.
Therefore, the government would not relocate the plant to South Sumatra or Lampung, as previously suggested.
The PIM-2 plant is slated to start operation in year 2002. Currently 45 percent of engineering, procurement and construction works have been completed.
The US$310 million PIM-2 project is currently being constructed by Toyo Engineering Co. of Japan, PT Rekayasa Industri, and PT Krakatau Engineering Co. Currently, a total of $109.17 or 35 percent of the total investment fund, had been used up.
Rachmat said supplies of natural gas in Aceh would dwindle in the next few years, and therefore, it would affect not only PIM-2 plant but also Arun Natural Gas Liquefaction (Arun NGL)'s liquefaction trains, and therefore, additional gas supplies for Aceh would be sought, including from Bontang.
"The shortfall will start in year 2004. In 2005, one of Arun's trains will stop operation because of no more gas supplies," he said.
"Learning from the experience of the stoppage of Arun gas fields and Arun plants, therefore starting in 2004, gas supplies for PIM-2 may be swapped with gas from Bontang, therefore, we agree not to relocate the plant to South Sumatra or Botang," he said.
Rachmat acknowledged that proven reserves in Arun currently stood at 11 trillion cubic feet - enough for eight years more of operation, supplying gas to Arun NGL and a number petrochemical industries, including PIM-2.
"It's true, if there is no acceleration of gas exploration in Aceh, then in 2008, technically all gas fields and gas liquefaction plants would stop operation," he said.
If there is new found of gas reserves in Aceh, it would help a lot, and supplies of natural gas to PIM-2 would not be swapped with gas from Bontang.
"However, to conduct new exploration, it need a long time, not just one or two years," he said.
Meanwhile, an expert staff at the Ministry of Energy and Mineral Resources, Kardaya Warnika, said that the government was in high hope that gas exploration activities in Block A, in Aceh, by Gulf Resource would result in new gas reserves for Aceh.
"We hope it will result in a great gas reserves," Kardaya said. (*)