Exxon resumes gas flow

Exxon resumes gas flow

JAKARTA (JP): U.S.-based ExxonMobil Oil Indonesian Inc.
resumed on Wednesday its gas supply to fertilizer company PT
Pupuk Iskandar Muda, jump-starting vital fertilizer production in
Aceh, a senior official at state oil and gas company Pertamina
said on Wednesday.

The general affairs manager for Pertamina's production-sharing
management directorate, Sidick Nitikusuma, said that Iskandar
Muda was ready for operation.

"At 4 p.m., the government instructed Exxon to start the flow
of gas to Iskandar Muda," Sidick told The Jakarta Post.

However, he said the volume of gas Iskandar Muda received,
which should be about 55 million cubic feet per day (mmcfsd), was
insufficient to allow the company to resume full production.

"The amount is significant, but not enough for Iskandar Muda
to fully resume operation at full production capacity," he said.

Iskandar Muda halted production when the flow of gas from
nearby Arun gas field was stopped due to security threats against
ExxonMobil staff members.

Local rebel troops have been blamed for the harassment.

ExxonMobil pulled out from Aceh, and returned after more than
four months on signs that security had improved.

Since their return last month, the company has restarted gas
production at only two of the four gas clusters.

"We expect clusters III and IV to start operating by mid-
September," Sidick said.

By then, he said, fertilizer company PT Asean Aceh Fertilizer,
and pulp firm PT Kertas Kraft Aceh would also be able to receive
a supply of gas.

For now, gas supplies to the two firms remain suspended.
Iskandar Muda received government priority because of the
company's size and Aceh's dependence on its fertilizer products,
Sidick explained.

Together the three firms consume about 10 percent of Arun's
total output. The other 90 percent goes to liquefied natural gas
(LNG) producer PT Arun NGL.

The suspension of Arun's LNG production has also prompted a
halt on LNG exports worth some US$100 million a month.(bkm)