Pertagas, PKG sign gas transportation agreement
Thursday, October 8 2015 - 01:02 AM WIB
PT Pertamina Gas (Pertagas) signed on Wednesday an agreement with state owned fertilizer firm PT Petrokimia Gresik (PKG) on transportation of gas from Madura Strait PSC to the latter?s petrochemical plant in East Java.
The gas will be delivered via East Java Gas Pipeline (EJGP), an open access gas pipeline owned by Pertagas, at the volume of 85 mmscfd from 2017 through 2026.
The gas will be sourced from MDA and MBH fields of the Madura Strait block owned by Husky CNOOC Madura Limited and delivered a new ammonia and urea production plant now under construction by PKG. The construction of the Amoniak-Urea II plant is scheduled for completion in 2017. PKG has signed a gas sales and purchasing agreement with Husky CNOOC Madura Limited. Pertagas will thus only act as shipper of the gas.
Pertagas? President Director Hendra Jaya said the firm at present supplies 60 mmscfd of gas to PKG?s existing plants. The agreement will thus add up the volume of gas delivered by the firm to the fertilizer firm.
?EJG has a lifetime until 2030. Actually, the pipeline has a capacity of 600 mmscfd. However, only 320,000 mmscfd of the capacity is now utilized,? Hendra said, adding that the pipeline still has a big spare capacity to deliver gas to PKG.
Hendra said the pickup point of the gas is Pagerungan, from which the gas is delivered through three pipe segments, namely Pagerungan-ORF Porong (28? diameter) ORF Porong-Gresik (28? diameter) and Gresik-PKG (10? diameter).
PKG?s President Hidayat Nyakman said the construction of the Amoniak-Urea II plant is now 21 percent complete. The new plant is designed with a capacity of producing 2000 tons of ammonia per day and 1,725 tons of urea per day.
According to reports, the new plant needs an investment of US$661 million. PKG has secured loans among others from PT Bank Nasional Indonesia (Persero). The winner of the EPC tender for the project is the consortium of Wuhuan Engineering and PT Adhi Karya (Persero).
PGK is the major supplier of fertilizer in East Java Province. At present, PGK has a capacity to produce 445,000 tons of ammonia and 460,000 tons of urea per year. This is still too low compared to the province?s demands, which amount to 850,000 tons for ammonia and 1 million tons for urea per year, Hidayat was once quoted by the local media as saying.
Editing by Johannes Simbolon