Govt mulls transferring gas to Aceh<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
The government is considering taking liquefied natural gas
\n(LNG) from Bontang LNG plant in East Kalimantan to cover the
\nexport commitments of Arun LNG plant in Aceh for the next three
\nyears to resolve the lingering natural gas shortage suffered by
\nfertilizer firms in Aceh.<\/p>\n
Under the plan, natural gas from ExxonMobil Oil Indonesia's
\n(EMOI) gas field will be supplied to three Aceh-based fertilizer
\nfirms, which for the past several months have suspended
\noperations due to the shortage of gas. EMOI is the sole natural
\ngas producer in Aceh and its output has largely been dedicated to
\nArun for LNG production. (EMOI's supply contract with the
\nfertilizer firms had previously ended in line with declining
\nreserves at its gas field).<\/p>\n
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
\nsaid that to fulfill the export commitments of Arun, it may take
\na total of 54 LNG cargoes from Bontang from 2005 to 2007.<\/p>\n
\"By taking LNG from Bontang to meet Arun's commitment to
\nforeign buyers, the natural gas (from EMOI) can be delivered to
\nfertilizer firms,\" Purnomo told reporters after a limited Cabinet
\nmeeting on Thursday.<\/p>\n
However, Purnomo said the government was still studying the
\nfeasibility of the plan especially as Bontang may also need to
\nsupply LNG to U.S.-based energy company Sempra and Korean steel
\ncompany Posco to cover the export commitment of the Tangguh LNG
\nplant in Papua as the construction of the country's third LNG
\nplant will only be completed in 2007.<\/p>\n
Posco has clinched a deal to buy 600,000 tons of LNG from
\nTangguh, while Sempra will buy 3.7 million tons both starting in
\n2007.<\/p>\n
Purnomo said that the shift of the export contracts from Arun
\nto Bontang would cost the government around US$100 million per
\nyear to cover the price difference between the LNG dedicated for
\nexport and the domestic market.<\/p>\n
He added that fertilizer firms in Aceh were expected to have
\nnormal natural gas supply in 2008 when the Block A gas field in
\nLhokseumawe, Aceh, operated by U.S. gas firm ConocoPhillips
\nstarts production.<\/p>\n
Activities at the three Aceh fertilizer companies: PT Pupuk
\nIskandar Muda (PIM) 1, PT PIM 2 and Asean Aceh Fertilizer have
\nbeen suspended for several months due to the gas supply problem.<\/p>\n
EMOI has seen its gas reserves declining during the past few
\nyears. This has also affected the operation of Arun as it now
\nonly operates four trains out of 6 trains in Lhokseumawe.<\/p>\n
At the moment, the government is importing LNG from other LNG
\nproducers to meet its commitment to Arun's LNG buyers and send
\nsome of the natural gas from EMOI to PT PIM 1.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-mulls-transferring-gas-to-aceh-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}