PGN to divert gas supply for PLN to other industries
Wednesday, August 10 2005 - 02:22 AM WIB
Under a deal which is now being negotiated by the two companies, PGN will pay interest for the diverted gas which is estimated to reach about 35 million standard cubic feet per day (MMSCFD).
?If PLN agrees with the offer, PGN will return the diverted gas supply to PLN in July 2006 when we get additional gas supply from Santos,? PGN?s president director Washington MP Simandjunak said.
According to Simandjuntak, the gas supply from PGN has declined by about 30 percent to about 85 million standard cubic feet per day from the normal level of 120 million standard cubic feet per day due to the decline in the gas supplies from gas operators.
Earlier reports had said that many industries particularly ceramic producers had stopped their operations due to the lack of gas supplies.
The gas supplies from PGN is getting worse lately particularly after the government required industries to buy diesel oil at market prices. PGN believes that many industries had increased their gas usage to cope with the sharp increase in the diesel oil prices.
Meanwhile, PGN said that this month, the company would put the priority on supplies of gas to Gresik Power and PT.Miwon Indonesia Tbk because of the condition of two companies were considered worst than others.
The plan to divert the gas supply for PLN will be against the government?s energy conversion program. PLN, for example, has been required to use gas in all of its diesel power plants. But Minister of Industry Andung Nitimihardja said that the energy conversion program would be carried only after the gas crisis is over.
Meanwhile Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that PLN would be allowed to continue to buy diesel oil at a subsidized price although the ceiling for the government?s subsidized diesel oil allocated for the company had been met.(*)