Malaysia can understand the closing of AAF plant

Minister of Foreign Affairs Hassan Wirajuda said that Malaysia could understand the Indonesian government's decision to close the Aceh-based fertilizer producer PT ASEAN Aceh Fertilizer (AAF), economic daily Bisnis Indonesia reported on Friday.

Hassan said that Malaysia had voiced its understanding of the case during a recent meeting between Indonesian Minister of Energy and Mineral Resouces Purnomo Yusgiantoro and a senior executive of the Malaysian state oil company Petronas.

"Petronas could understand the problem and the difficulties being faced by AAF," he was quoted as saying.

The Indonesian government recently decided to close the operation of AAF due to the lack of gas supply. The fertilizer plant, which is jointly owned by ASEAN member countries including Indonesia (60 percent), Malaysia (13 percent), the Philippines (13 percent) and Singapore (one percent) previously received gas supplies from ExxonMobil Indonesia.

But, due to the decline in gas reserves, the company's gas production is only to enough to feed the Arun LNG plant and to supply the gas needs of two other fertilizer plants Pupuk Iskandar Muda I and Pupuk Iskandar Muda II. (*)