Gas suppliers, Pupuk Kaltim conclude talks on gas price

Oil and gas production sharing contractors and East Kalimantan-based fertilizer producer PT Pupuk Kalimantan Timur (Pupuk Kaltim) have concluded their talks about the price of gas for the fertilizer company, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Thursday.

The minister did not say however whether the two parties had agreed on fixed gas prices. He only said that they had decided a formula to set gas prices in accordance with the price of crude oil and fertilizer.

Pupuk Kaltim were trying to obtain gas for its Unit I and Unit IV, and had urged gas suppliers to reduce their gas prices. So far, Total E&P Indonesie and Vico are among gas producers supplying the product to the fertilizer maker.

Pupuk Kaltim has capacity to produce 2.9 million tons of fertilizer per year.

Meanwhile, Purnomo said gas producer ExxonMobil Oil Indonesia and Aceh-based fertilizer makers PT Pupuk Iskandar Muda (PIM) and PT ASEAN Aceh Fertilizer had not yet agreed on gas prices.

PIM wanted Exxon to sell gas to it for US$1.5 per million British thermal unit (MMBTU), while ASEAN Aceh Fertilizer was willing to buy the product only at $1.4 per MMBTU, Purnomo said.

Exxon was ready to sell its gas to the companies at $1.85 per MMBTU.

Meanwhile, the government said recently that it had planned to set gas prices for fertilizer makers at $1.5 per MMBTU. (godang)