Arun suffers Rp 4t in losses due to ExxonMobil closure

JAKARTA (JP): Aceh-based liquefied natural gas (LNG) producer PT Arun NGL said it suffered some Rp 4 trillion (US$350.8 million) in losses due to the four-month closure of ExxonMobil's gas fields in the troubled province.

The vice president of PT Arun, Hasan Saad, said on Friday the losses were due to the firm's failure to export some 40 LNG shipments following the closure of ExxonMobil's gas fields.

"The longer ExxonMobil's gas fields do not operate, the greater the losses we will suffer," he was quoted by Bisnis Indonesia as saying.

He added that the company would not come close to meeting this year's target of delivering 116 LNG shipments, or about 23.5 million metric tons of LNG.

The Arun plant stopped its LNG shipments after its natural gas supplier, ExxonMobil Oil Indonesia Inc., the Indonesian unit of American oil and gas giant ExxonMobil Corp., suspended operations in Lhokseumawe, Aceh, in March due to security concerns in the province.

ExxonMobil supplies 90 percent of its natural gas production to PT Arun, which exports a large part of its LNG to Japan and South Korea.

The other 10 percent is supplied to fertilizer firms PT Pupuk Iskandar Muda and PT ASEAN Aceh Fertilizer (AAF), as well as pulp firm PT Kertas Kraft Aceh.

Hasan said the Arun plant was now only capable of keeping its machinery running to avoid any damage, using gas supplied from offshore gas fields in North Sumatra.

"But this gas can't serve as a substitute for the gas from ExxonMobil (as the raw material for LNG production) because they have different qualities," he said.

He expected ExxonMobil would begin operations at its gas fields as soon as possible.

ExxonMobil spokeswoman Deva Rachman was quoted as saying in a report late last week that the company still hoped to resume production "as soon as possible", but could not give an exact timetable.

Separately, AAF said it had suffered Rp 264 billion in losses due to the closure of ExxonMobil's gas fields.

"We really depend on the ExxonMobil gas fields," company spokesman Badruddin said.

AAF produced 587,055 tons of fertilizer last year, of which 99 percent, or 567,027 tons, was exported. (05)