New govt seeking ways to save AAF
New govt seeking ways to save AAF
Zakki P. Hakim, The Jakarta Post/Jakarta
The new government is seeking ways to avert the closure of Aceh-
based fertilizer manufacturer PT Asean Aceh Fertilizer (AAF), as
the Ministry of Industry proposes several options, a senior
official has said.
Minister of Industry Andung A. Nitimihardja said that the
ministry had discussed the matter with Oil and Gas Regulatory
Implementing Body (BP Migas), the regulator that oversees the
country's oil and gas upstream sector, to ensure the delivery of
natural gas -- a key raw material -- to the firm.
"We are seeking alternatives to closing AAF. All stakeholders
must prioritize national interests over individual benefit," he
said on Tuesday.
He said that one of the options being discussed was to
reschedule liquefied natural gas (LNG) exports to Japan and South
Korea, and to obtain gas from other producing areas in the
country.
The previous administration of Megawati Soekarnoputri
announced in October that it wanted to shut down AAF because
existing and future natural gas production in the province was
considered insufficient to cover both LNG export commitments and
the needs of other manufacturers there.
The natural gas reserves in the Arun gas field in the province
have been declining, while most of the gas output is exported.
Andung explained that one of the options being considered was
to use gas from Bontang gas field in East Kalimantan to help
cover Arun's export commitment to the Japanese and South Korean
buyers, while part of the Arun output could still be used for
fertilizer firms in the province.
However, such an option would require PT Pupuk Kalimantan
Timur (PKT) in East Kalimantan to close one of its factories, as
more reserves in the region would be allocated for LNG
production, he said.
He acknowledged, however, that it might be difficult to
convince PKT, but he also pointed out that it was in the national
interest.
It was not immediately clear how much AAF would have to pay
for the natural gas, should the fertilizer maker continue
operating, as Andung said the ministry was still calculating.
Since it started in 1979, AAF had contributed to the
development of various economic sectors in the province such as
employment, trade and small- and medium-sized enterprises.
The former government said, however, that the proposal to shut
down AAF would still consider other shareholders, including the
governments of Malaysia, Thailand, Singapore and the Philippines.