PLN starts supply gas to Petrogres

State fertilizer firm PT Petrokimia Gresik (Petrogres) is scheduled to resume production today following the completion of the installation of 400-meter-long pipeline under the swap gas program enabling the company to receive the supplies 27 million standard cubic feet per day (MMSCFD) from state electricity firm Perusahaan Listrik Negara (PLN), Bisnis Indonesia reported Saturday.

Petrogres and PLN have also agreed on the gas price of between US$2.51 per MMBTU and US$2.75 per MMBTU.

Petrogres?s public relation head Hariyono said in Surabaya Friday that despite the tough negotiation on the technical matters and gas price between Petrogres and PLN, the companies have finally reached an agreement.

According to Hariyanto, the 400-meter pipeline from PLN has been completely installed. The pipeline is connected to Kodeco and spans to Gresik coal-fired power plant managed by PT Pembangkitan Jawa-Bali, a subsidiary of PLN.

?We have tested the hydro pressure and cleaned the pipe since yesterday and hopefully, we can resume production of ammonia tomorrow (today),? he said.

Apart from receiving gas supply of 27 MMSCFD under the swap program from PLN, Petrogres has received supply of 15 MMSCFD from state gas distributor PT Perusahaan Gas Negara (PGN) and also receive another 7 MMSCFD from Kodeco based on a new contract with the company.

Hariyanto explained that the company needs the minimum 43 MMSCFD of gas to produce 445,000 tons of ammonia per year. ?Gas is the main raw material of ammonia and it is irreplaceable,? he said.

Petrogres halted its production for 50 days since the company failed to receive gas supply due to the explosion of transmission pipeline owned by state oil and gas company Pertamina in Porong on November 22, 2006.(*)