Govt decides to stop AAF fertilizer plant operation

The government has finally decided to stop the operation of fertilizer factory PT Asean Aceh Fertilizer (AAF) in Aceh province given the limited natural gas supply from the aging Arun gas field, Bisnis Indonesia newspaper reported in its Tuesday edition.

This decision was taken by the government during a limited Cabinet meeting on Monday.

The ministers who attended the meeting, which was chaired by President Megawati Soekarnoputri, included Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti, Home Affairs Minister Hari Sabarno, Minister of Communications Syamsul Muarif , Minister of Foreign Affairs Hassan Wirayuda and Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

Aside from AAF, the Arun field, owned by American energy giant ExxonMobil, has been for many years supplying natural gas to the Arun liquefied natural gas (LNG) plant, two fertilizer plants owned by PT Pupuk Iskandar Muda and paper producer PT Kertas Kraft Aceh.

After the meeting, Dorodjatun said Arun gas field was no longer capable of continuing supplying gas to all the facilities due to the declining resources.

That?s why, after taking into consideration of several aspects, including priority, the government decided to stop AAF's operation.

?Since AAF plant is an old fertilizer plant, we are forced to decide to stop its operation,? Dorodjatun said.

Foreign Minister Hassan will convey this decision very soon to the other ASEAN (Association of Southeast Asian Nations), who have a stake in AAF.

Indonesia through its South Sumatra-based fertilizer plant PT Pusri has 60 percent stake in AAF. Other shareholders are Malaysia (13 percent), the Philippines (13 percent), Thailiand (13 percent) and Singapore (1 percent). (*)