PIM, Kujang I A fertilizer plants to resume operation

State owned fertilizer producer PT Pupuk Iskandar Muda (PIM) in Aceh and the first unit of state owned fertilizer producer PT Pupuk Kujang (Kujang I A) will soon resume their operations after being suspended for several months due the lack of gas supply, Investor Daily reported on Friday.

The decision to resume the operation of the two fertilizer producers was made during an inter-ministerial meeting between Minister of Energy and Mineral Resources Purnomo Yusgiantoro, Minister of Industry Fahmi Idris and State Minister of State Enterprises Sugiharto.

?The decision is final,? Director General of Chemical and Agro Industries Benny Wahyudi said. ?The decision would be reported to the President today,? he added.

With such a decision, the government would ask ExxonMobil Indonesia to resume its gas supply to PIM which stopped its operation on November due to the lack of gas supply. As the part of the deal, the government would ask the Badak LNG Plant in East Kalimantan to fulfill the export commitment of the Arun LNG plant in Aceh, which receives its gas supply from ExxonMobil?s Arun gas field.

In order to enable the Badak LNG Plant fulfill the export commitment of the Arun LNG plant, the government would stop the operation of PT Pupuk Kaltim fertilizer producer?s two factories. ?It means that about 10 percent of gas supply to PT Pupuk Kaltim will supplied to the Badak LNG Plant to enable it meet the export commitment of the Arun LNG plant,? Wahyudi said.

At present, the gas supply from Arun gas field is only enough to meet the export commitment of the Arun LNG plant.

Meanwhile, the government would also ask Pertamina and its partner PT Odira Energy Persada to resume its gas supply to PT Pupuk Kujang so that its fertilizer plant IA would be able to continue its operation at least until April.

Kujang IA was suspended its operation recently. The contract with Pertamina and Odira ended. PT Kujang should actually end in December but the gas supply was cut off before the end of the contract due to the depletion of their gas reserves.

Pupuk Kujang has signed a contract with PT BP Indonesia to replace the gas supply from Pertamina beginning January. But the latter was only able to resume the gas supply in 2007 due to a problem with its gas pipeline.

Wahyudi said that the government would find another solution if until April, Pertamina and Odira could not continue their gas supply to Kujang 1 A. (*)