Indonesia to reduce gas supply to Japan
Monday, August 13 2007 - 02:35 AM WIB
To fulfill the needs of fertilizer firm PT Pupuk Iskandar Muda (PIM) and paper producer PT Kertas Kraft Aceh (KKA) in Aceh, the government would cut down exports of liquefied natural gas (LNG) by 1,120 MMSCFD or about 12 cargo to Japan in the 2008 – 2010 period, Bisnis Indonesia Daily reported on Monday.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in
Lack of supply to the fertilizer industry encouraged the government to prepare three options to fulfill the need, he said.
“There were three options (put into consideration). But, we have decided to cut down LNG shipment to Japan. They (Japanese buyers) have agreed to the supply cuts,” Purnomo said.
The decision was made during a meeting between the senior staff from the Office of the Coordinating Minister of Economy and the Ministry of Energy and Mineral Resources in
Budi Indianto, the chief of the marketing division of BPMIGAS, the government’s regulatory body for oil and gas exploration and production, the supply cuts were a "mid-term" solution to the problems faced by PIM and KKA.
"BPMIGAS hopes that after 2010, the two companies will start getting gas supplies from Block A and Krueng Mane block," Budi said. Block A is owned by a consortium led by Indonesian firm PT Medco Energi International while Krueng Mane belongs to a Italian firm Eni Spa.
PT PIM which operates two fertilizer plants each with a production capacity of 1,750 tons of urea fertilizer per day, stopped operation in 2005 due the lack of the gas supply. The gas supply was resumed at the beginning of 2006 after a part of the gas supplies from the Arun LNG plant was shifted to the plant, but the gas supply gas was halted again in the second semester of the year.
The government decided in April to resume the gas supply to the fertilizer producer but the gas supply contract will end in October this year. (*)