Govt to compensate sales of Exxon?s gas to fertilizer producers

The government will compensate the difference of the price of gas sold by PT ExxonMobil Indonesia in Aceh to the province?s fertilizer producers PT Pupuk Iskandar Muda I and II, and PT ASEAN Aceh Fertilizer, Koran Tempo reported on Friday.

Kardaya Warnika, the deputy of the chairman of BPMIGAS, said in Jakarta on Thursday that ExxonMobil would still receive the same value although the price of gas sold to the fertilizer was only a half of the gas price in the international market.

ExxonMobil is required to sell its gas to the fertilizer producers at US$1.5 per million British thermal unit (mmBTU), or only a half of the international price which reached about US$3 per mmBTU. "The government through the ministry of finance will pay the price difference so that the actual price of the gas sold to the fertilizer producer would be equal to the price level in the international market," he said.

He said that the government was still discussing the price problem. "The most important thing is that ExxonMobil will receive the same value," he added.

Kardaya also acknowledged that ExxonMobil was reluctant to negotiate the extension of the gas sales contracts to the fertilizer producers until the government agreed to compensate the gas sales. (*)