Pertamina faces difficulties to buy gas for PT PIM

State owned oil and gas company Pertamina said that it faced difficulties in finding the liquefied natural gas (LNG) in the international market for the Aceh-based fertilizer producer PT Pupuk Iskandar Muda, Kompas reported on Tuesday.

Arie Soemario, the marketing and commercial director of Pertamina, said in Jakarta on Monday that the company had contacted a number of LNG producers overseas but none of them had available stocks for sales.

According to him, a month ago, Oman had offered its LNG to Pertamina but the latter could not take the offer because there was no certainty that the government would cover its payment. "We could not take the offer because we were only given two days to settle the payment," he added.

PT PIM has suffered a shortage of gas supply due to the decline in the production of gas producer PT ExxonMobil Indonesia, the only gas supplier in the province. At present, its gas production is only enough to meet the export commitment of LNG producer PT Arun.

The government has ordered PT Exxon to resume its gas supply to PT PIM to prevent the company from halting its production activities. In return, the government has agreed to import a LNG in order to help the LNG producer meet its export commitment for July.

The government recently said it would provide bridging funds of about US$16 million to buy a cargo of LNG which costs about US$23 million. PT PIM will pay the remaining US$7 million with its own funds.

PT PIM's president director said that the fertilizer company had been allowed to export its fertilizer to obtain additional funds to pay the company's bridging funds. (*)