Swap deal to secure gas supply for Pupuk Kujang being studied

The government is studying the possibility of using a swap deal in order to secure the future gas supply for fertilizer producer PT Pupuk Kujang, near Cikampek, West Java, Bisnis Indonesia reported on Thursday.

Director General of Chemical and Agro Industries at the Ministry of Industry Banny Machyudi said in Jakarta on Wednesday that his office was still negotiating with Pertamina to switch gas supply from the company?s other buyer to Pupuk Kujang.

?As part of the deal, the government would provide natural gas to the company whose gas supply would be cut to meet the gas need of PT Pupuk Kujang,? he added.

Pertamina has said that it would not be able to renew the gas supply contract for the first plant unit of PT Pupuk Kujang due to depletion of its gas sources. Under the existing contract which will end in December, Pupuk Kujang receives gas supply of about 60 million metric standard cubic feet to produce about 570 tons of urea and 330 tons of ammonia a year.

The gas supply contract for PT Pupuk Kujang?s second plant which would begin operation next year would expire in 2009. (*)