Kujang fertilizer plant halts its operation on gas shortage

State owned fertilizer producer PT Pupuk Kujang has stopped the operation of its fertilizer plant in Cikampek, West Java due to the shortage of gas supply, Bisnis Indonesia reported on Tuesday.

The company's spokesman said that the first unit of PT Kujang's fertilizer plants had stopped operation for the past several days because Pertamina was no longer able to meet its gas needs.

"We have lost in production about 1,500 tons of urea a day due to the stoppage of the plant's operation," he said, adding that the halt in the operation of the company's first plant would seriously affect the fertilizer supply in West Java which reaches about 800,000 tons a year.

The demand could be met only if PT Pupuk Kujang can operate both the first and the second unit of its fertilizer plant which is scheduled to begin operation in 2006. The two power plants will be able to producer about 1.14 million tons of urea a year.

Pertamina has said that it would not be able to renew the gas supply contract for first plant unit of PT Pupuk Kujang due to depletion of its gas sources. Under the existing contract which will end in December, Pupuk Kujang receives gas supply of about 60 million metric standard cubic feet to produce about 570,000 tons of urea and 330,000 tons of ammonia a year.

The gas supply contract for PT Pupuk Kujang's second plant (1-B) which would begin operation next year would expire in 2009. (*)