Govt to continue Aceh fertilizer project despite concerns over gas supplies

Outgoing Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the government was committed to continuing the development of the second fertilizer plant owned by PT Pupuk Iskandar Muda, called PIM-2, in North Aceh despite concerns over gas supplies.

Purnomo told Petromindo.Com Saturday that the government would take gas from other sources for the new fertilizer plant if ExxonMobil Oil Indonesia Inc, a unit of American energy giant ExxonMobil Corp, which now supplies gas to the PIM-1 fertilizer plant from its Arun fields, did not have enough gas to also supply the new fertilizer plant.

The other sources are the Block A production sharing contract (PSC), which is operated by Canadian firm Gulf Indonesia Resources, and the Pase PSC, which is operated by ExxonMobil.

?The Energy and Mineral Resources Ministry, along with (state oil and gas company) Pertamina are studying the possibility of supplying gas from the contract areas to the PIM-2 plant,? Purnomo said, adding the new plant will need 55 million cubic feet of gas per day (MMCFD).

The government was well understanding Aceh people?s wish to have another fertilizer plant in the province, Purnomo said.

Some people earlier suggested that the government might relocate the PIM-2 project to other areas which are close to abundant natural gas resources, such as South Sumatra and Lampung.

But, the ministry was quick to turn down the suggestion, saying the government would go ahead with the development of the PIM-2 plant in Aceh despite projections that gas supplies from ExxonMobil?s Arun fields will dwindle in the next few years.

Some ministry officials indicated the government might take liquefied natural gas (LNG) supplies from the Bontang LNG plant in East Kalimantan to meet the gas needs of the new fertilizer plant.

According to local press?s reports, the PIM-2 plant is slated to start operation in year 2002. Currently 45 percent of engineering, procurement and construction works have been completed.

The US$310 million PIM-2 project is currently being constructed by Toyo Engineering Co. of Japan, PT Rekayasa Industri and PT Krakatau Engineering Co. Thus far, a total of $109.17 of 35 percent of the total investment fund has been used up. (Godang)