Govt mulls closing Arun LNG sooner to secure gas supply to fertilizer plants

The government is considering to close Arun liquefied natural gas LNG earlier than schedule in a bid to secure gas supply for fertilizer plants located in Aceh Province.

“After 2007, we will evaluate the possibility to shift Arun’s LNG contract to Bontang, so we can use the remaining gas reserves for fertilizer plants,” Head of BP MIGAS, Rachmat Sudibyo said Friday in Bogor.

Rachmat said several LNG contracts after 2007 were made under a two sources basis, Arun or Bontang. However, Arun itself still has two contracts that it should fulfill after 2007.

“These contracts that we will consider to be shifted to Bontang,” Rachmat added.

Rachmat also said the government wanted to reduce its export commitment to 75 cargoes next year and will allocate more natural gas for fertilizer plants. “Therefore, only three trains to be operated next year from four trains this year,” Rachmat said. One cargo contains between 56,000 to 60,000 tons of LNG.

The operations of two fertilizer companies, ASEAN Aceh Fertilizer and Pupuk Iskandar Muda, have been disrupted due to shortages of gas supplied by Exxon Mobil Oil Indonesia, the sole gas producer in the province.

Rachmat added the government would continue to close another Arun’s train in 2007 and one in 2009.

The Arun complex consists of six LNG trains with a total production capacity of 12.3 million tons of LNG annually. Meanwhile, the eight-train Bontang complex in East Kalimantan has 21.6 million MT of production capacity. (alex/godang)