Purnomo rejects the rescheduling of Arun's LNG exports

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has rejected a proposal to reschedule liquefied natural gas (LNG) exports from the Aceh-based LNG producer PT Arun, Koran Tempo reported on Friday.

The paper quoted fertilizer firm PT Asean Aceh Fertilizer (AAF) chief labor union Marwan Yahya as saying that a rescheduling of LNG export would cause financial loss to the state as the government would be required to pay compensation to the local gas producer.

Marwan was speaking to reporters following a meeting with Purnomo in a bid to prevent AAF from being closed down as the Aceh-based company had been facing difficulties in obtaining key gas raw material as the commodity had been mainly allocated to produce LNG by PT Arun to meet export committments to Japan and South Korea.

Marwan said that the minister would let the Cabinet to make a final decision on the proposed rescheduling of LNG export from Aceh.

He said that a proposal for Bontang LNG plant in East Kalimantan to takeover PT Arun's export committments had also been turned down by Purnomo.

The government has been asked to stop the operation of AAF - which is jointly owned by ASEAN member countries Indonesia, Malaysia, Singapore, the Philippines and Thailand - due to continued decline in the natural gas supply. The gas supply in the province is only enough to meet the gas need of PT Arun. (*)