Gas supply to PT Pupuk Kaltim reduced again

State owned oil and gas Pertamina through its three production sharing contractors TotalFinaElf, Unocal and Vico again reduced gas supply to PT Pupuk Kalimantan Timur (PKT) in Bontang, East Java, forcing the state owned fertilizer producer to close down one of its four factories and cut down the production capacities of the others, Kompas reported on Wednesday.

PKT?s public relations manager Sulais said in Bontang on Tuesday that the gas supply was cut down to only 146 million metric cubic standard fee per day (MMSCFD) beginning early on Monday from the normal level of 220 MMSCFD.

"Only one of the factories, Kaltim I, was stopped from operation. But we are forced to reduce the capacities of factories II and III to ensure that the factory IV will be able to continue operation," he was quoted as saying. He added that the factory IV should remain in operation to prevent start-up problem.

He said that if the cut in the gas supply continued, it would severely affect the country?s fertilizer production.

Pertamina?s production sharing contractors started to reduce the gas supply to the fertilizer producer on August 14 due to a price problem. The cut in the gas supply was, however, resumed on September 24 after the cut in the gas supply drew public controversies.

Sulais said that the increase in the gas supply was possible due to the switch of the gas supply from PT Kaltim Parna Indonesia, which was not in full operation during the time.

Pertamina denied reports that the cut in the gas supply was due to price problem, saying that it occurred due to a damage in the gas pipeline. But the gas producers recently said that there was no technical problem with their transmitting facilities. (*)