Pertamina agrees to increase gas supply to Pupuk Kaltim

State owned oil and gas company Pertamina has agreed to increase its natural gas supply to Indonesia?s largest fertilizer producer PT Pupuk Kalimantan Timur (Pupuk Kaltim) to 202 million standard cubic meters per day to ensure that the fertilizer company would be able to fulfill the country?s fertilizer demand, Koran Tempo reported on Monday.

The agreement was unveiled by Pupuk Kaltim?s president Omay K. Wiraatmadja following a meeting between Minister of Industry and Trade Rini MS. Soewandi and Minister of Energy and Mineral Resources Purnomo Yusgiantoro in Jakarta in the weekend. Pertamina?s president Baihaki Hakim and representatives from the Office of State Minister for State owned Enterprises and the Implementation Body of Oil and Gas also attended the meeting.

Pupuk Kaltim, the country?s largest fertilizer producer with an annual production capacity of 2.9 million tons, has stopped the operation of one of its four fertilizer plants since August 14 due to a decline in the gas supply from Pertamina?s production sharing contractors.

In the meeting, Pertamina agreed to provide gas supply of 202 million standard cubic meters per day to ensure that Indonesia would not turn to foreign fertilizer producers to meet its fertilizer demand. "With the agreement, we don?t need to import," he added.

Pupuk Kaltim, which is in Bontang, East Kalimantan, has operated only at 60 percent of its capacity due to the decline in the gas supply. Normally, the company has the capacity to produce between 1,700 and 1,750 tons of fertilizer per day. The decline in the company?s production will bring a serious impact in the country?s total fertilizer production. (*)