Govt tries to find new gas resource for PT Arun NGL

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has pledged to make any possible efforts to find new gas resources for Indonesia?s second largest liquefied natural gas (LNG) producer PT Arun Natural Gas Liquefaction (Arun NGL)in North Aceh, which is facing a serious shortage of gas supply, Kompas reported on Monday.

The minister said that aside from trying to find new gas fields, the government had also asked ExxonMobil Oil Indonesia, the only gas supplier of the LNG plant, to increase investment in order to increase its gas production.

?At present, ExxonMobil has agreed to operate its Block A beginning in 2007 and to reactivate its Block Pase,? the minister said when visiting the LNG plant last week.

ExxonMobil suspended activities in both blocks for years due to security problem caused by the conflict between the Indonesian military and Aceh's separatist group. The govenrment is currently staging a military campaign against the separatist group.

The continued decline in the gas supply from ExxonMobil is feared to result in the drop in Arun's LNG exports to 58 ships in 2005 from 113 ships in 2002. If there is no additional gas supply, there will be only two LNG trains in operation in between 2005 and 2008, while the production will further decline to about 30 ships, according to the firm.

A 60-MW power plant owned by PT Arun NGL has been idle since 1999 due to the lack of gas supply and the power plant will remain inactive within the next few years because there is no guarantee yet that it would receive gas supply.

Purnomo said upstream authority BP Migas was trying to find new gas sources near the plant's site in Lhokseumawe in efforts to save the LNG?s plant future operation. Once BP Migas is able to identify new potential gas blocks in the area, they will be soon auctioned off to new gas investors.

The other alternative, according to Purnomo, is to link the LNG plant with the newly operated South Sumatra-Singapore gas pipeline. (*)