Igas Utama to sue Pertamina over gas supply

Natural gas distribution company PT Igas Utama plans to file a lawsuit against state oil and gas firm PT Pertamina because it unilaterally decided to cut the gas supply for the company.

Igas president director Irene Ratnawati Rusli said on monday that the cut had potentially caused US$1.2 million in losses to her company. "The figure represents the claims filed by our customers."

The company may also lay off 6,000 employees.

Igas is the natural gas supplier for big industrial plants in Cilegon and Cibitung such as PT Candra Asri, PT Dong Jin, PT Kayaba Indonesia, PT LG Philips, Displays Indonesia and PT Essar Indonesia.

Pertamina started curbing their supply on Aug. 21 after terminating the contract on July 30. The firm argued that Igas had yet to provide a Stand By Letter of Credit worth US$1.13 million as agreed upon in the Aug. 31, 2004 agreement.

In contrast, Irene said Igas had receivable payments from Pertamina worth $300,000 and a deposit account of $295,000.(dino)