Pupuk Kaltim awaits gas deals for IPO
Thursday, January 25 2001 - 04:30 AM WIB
State-owned fertilizer company PT Pupuk Kaltim is awaiting the conclusion of negotiations with state oil and gas company Pertamina over its demand for a long-term 10-year gas purchase contract to support the company's initial public offering of shares, slated in the middle of this year.
Pupuk Kaltim's corporate secretary Mashudianto said the company currently held a three-year gas sales contract with Pertamina, at a price of US$1.30 per Million British Thermal Unit (MMBTU).
"We want to extend this contract into a 10-year contract," Mashudianto said, arguing that with such a long-term gas purchase contract, Pupuk Kaltim would enjoy a prospective profits for a longer period of time, and this would make the company's shares be attractive for investors.
"Currently, teams from Pupuk Kaltim and Pertamina are still holding negotiations," he added.
Earlier, the director general of oil and gas at the Ministry of Energy and Mineral Resources, Rahmat Sudibyo, said it would be difficult for the government and Pertamina to provide a long-term of natural gas sales contract of up to 10 years if it uses the same price of $1.30 per MMBTU.
He noted that the current gas sales price of US$1.30 per MMBTU for fertilizer company is subsidized price. The commercial price for natural gas should be $2.00 per MMBTU.
Rahmat, nevertheless, said that the government could consider giving long-term gas sales contract if it was wanted by the investors.
Mashudianto noted that this year would be a good year for Pupuk Kaltim to offer shares to the public through initial public offering because of its good financial records during the past five years.
He that the company's unaudited pretax profit for last year totaled Rp 750.42 billion, an increase from Rp 532.9 billion in 1999, Rp 701.4 billion in 1998, Rp 367.2 billion in 1997, RP 227.4 billion in 1996 and Rp 140.2 billion in 1995.
Located in Bontang, East Kalimantan, Pupuk Kaltim operates three fertilizer plants with a combined production of 1.56 million metric tons of ammonia last year and 2.23 million tons of urea. The company produced 1.40 million tons of ammonia and 2.18 tons of urea in 1999.
The company's fourth urea plant, currently under construction and slated to be completed in 2002, would boost Pupuk Kaltim's urea production capacity to 3 million tons per annum. (*)