Govt to impose tighter control on LNG export from Aceh

The government will impose a tighter control on liquefied natural gas (LNG) export from Aceh to ensure that part of the limited gas output in the province is also supplied to local industries, the Investor Daily reported on Tuesday.

Agus Mundiyono, the director of the upstream chemical industries at the ministry of industry, said in Jakarta on Monday that the extra control would be made because PT ExxonMobil Oil Indonesia, the sole gas producer in the province, had breached its promise to provide enough gas supply to fertilizer producers PT Pupuk Iskandar Muda I and II, as well as PT Asean Aceh Fertilizer (AAF).

ExxonMobil, which has seen its gas reserves in the province declining, has been supplying the gas to local LNG producer PT Arun NGL to meet LNG export committment.

But the fertilizer firms have demanded the government to pressure ExxonMobil to also distribute part of its gas output to them as the commodity is an essential raw material for the fertilizer production.

The decision to impose a tighter control on the the LNG export was made during a meeting of economics ministers on Monday.

The ministry of industry has been assigned to carry out the control in cooperation with related government agencies.

"The government feels it is necessary to give an extra control on the LNG exports to save the fertilizer firms from collapsing. The government won't be able to cope with the social impact from the massive layoff if the fertilizer companies were closed," he added.(*)