ExxonMobil signs Aceh gas deal
ExxonMobil signs Aceh gas deal
Zakki P. Hakim, The Jakarta Post, Jakarta
ExxonMobil signed on Friday an agreement that would secure the
year's natural gas supply for fertilizer firms PT Pupuk Iskandar
Muda I and II ((PIM-1, PIM-2) in Aceh as the country enters
planting season.
The agreement, signed at the office of the Oil and Gas
Implementing Body (BP Migas), allows oil and gas giant ExxonMobil
Oil Indonesia to supply 57 million standard cubic feet per day
(mmscfd) of natural gas to PIM-1 starting this week.
ExxonMobil is currently the sole natural gas producer in Aceh,
and its output is largely converted into liquefied natural gas
for the Arun LNG plant, which is then exported.
Another deal is expected to be signed in February or March to
secure about 60 mmscfd of natural gas for PIM-2, BP Migas head
Rachmat Sudibyo said.
The two deals should cover almost all of the firms'
operational need of 120 mmscfd of natural gas.
"The contract is a result of the government's effort to meet
the gas demand in Aceh, as well as to help recover the economy
devastated by the recent tragedy," said Rachmat, referring to the
massive quake and tsunamis that hit Aceh and North Sumatra last
weekend, which has killed more than 100,000 people.
Lili Djadjuli, PIM-1 technical and development director, said
the company expected to start receiving the supply on Tuesday.
The two firms have a combined annual production volume of
about 600,000 tons of fertilizer, making them the largest
suppliers for Aceh and North Sumatra.
Fertilizer firms in Aceh have been struggling to survive
because of a gas shortage from depleted reserves.
PIM-1 has been operating at below 80 percent production
capacity, while PIM-2 did not produce fertilizer in 2004.
PT ASEAN Aceh Fertilizer (AAF), another fertilizer firm, was
closed down by the government last October because of the
shortage.
The closure of AAF gave rise to fears that the other two
fertilizer producers would follow suit and disrupt the national
fertilizer supply.
Earlier this year, South Sumatra-based fertilizer maker PT
Pupuk Sriwijaya (Pusri) was forced to provide about 21,000 tons
of fertilizer to meet demand in the two provinces.