PT PIM stops operation as ExxonMobil halts gas supply
Saturday, July 9 2005 - 01:34 AM WIB
As a consequence, the fertilizer company would have no choice but to lay off its 4,000 workers.
PIM's president director Hidayat Nyakman said on Friday that the fertilizer producer began to stop all the operational activities on midnight Thursday after ExxonMobil informed that there would be no more gas supply for the fertilizer plant.
"We received the notice for the cut in the gas supply from ExxonMobil on Thursday evening. It was really surprising us because the government has ensured that we would continue to receive gas supply," he said.
According to him, about 4,000 workers would be laid off until the fertilizer producer could resume its operation. "The company still has enough funds to pay the salaries of the workers," he added.
The government has promised to import a cargo of liquefied natural gas (LNG) to enable ExxonMobil to continue its gas supply to PIM. The LNG, which will be imported by Pertamina, will be used to meet the Arun LNG plant to meet its export commitment to its overseas buyer so that part of the gas supply from the Arun gas field could be diverted to the fertilizer producers.
The import is needed because the current production of the Arun gas field is only enough to meet the export commitment of the Arun LNG plant.
Hidayat said that the ministry of finance had issued a guarantee to ExxonMobil that it would import a cargo of LNG to compensate the use of its gas for PIM. "But the guarantee is not enough for ExxonMobil which demands the government to first sign an LNG import contract before it makes a new deal with PIM," he added. (*)