Mon, 14 Aug 2000

Workers' protests threaten Badak natural gas supply

JAKARTA (JP): Workers' protests at gas company Vico Indonesia Ltd might cause a total cut in the natural gas supply to the country's largest liquefied natural gas (LNG) producer PT Badak in Bontang, East Kalimantan, a spokesman of state oil and gas company Pertamina said here on Saturday.

Spokesman for Pertamina's Foreign Contractors Management Body (BPPKA) Sidick Nitikusumah said that workers for one of Vico's subcontractors PT Perdana Karya, were trying to gain control over Vico's main gate in order to interrupt the gas supply.

He said that some 250 workers have been on strike since early August but the police managed to disperse them on Friday as they were trying to gain a full control of Vico's operation.

"The workers have been working here for many years and know what to do to hurt the company's operation," he told The Jakarta Post over the weekend.

The Badak plant, which has a production capacity of approximately 22 million metric tons of LNG per year, is jointly operated by Pertamina and its production sharing partners Vico, Unocal Indonesia and Total Indonesie.

The plant receives its gas supplies from nearby gas fields operated by Vico, Unocal and Total.

A pipeline running through Vico's main gate supplies the Badak plant with 3.4 billion cubic feet (bcf) of gas per day, of which Vico supplies 1.4 bcf and Total Indonesie 2 bcf.

"If they manage to take over the main gate for a longer period, it will also threaten Badak's operation," Sidick said.

He said that although the blockade had not affected the company's production, supply of raw material and logistics had been disturbed during the blockade.

Meals, Sidick said, could only be delivered under police protection as the company's vehicles were frequently stoned.

According to him, the striking workers intend to disrupt Badak's operation by blockading gas supplies from Vico's pipeline.

The LNG plant faces its second threat to operations after local farmers temporary blockaded Vico's main gate earlier this year to demand compensation for damages the company allegedly caused to their farms.

Sidick said that Pertamina and Vico were currently seeking a legal solution to the farmers' demands and accusations at a local court.

The unrest surrounding Badak's operations comes amid Pertamina's all-out effort to find LNG buyers.

India had shown interest in purchasing LNG from the Badak plant, and sent last month a delegation here, but it fell short of signing a contract.

"At present the workers have gathered around the gate, mingling with locals," Sidick said.

He said that even the locals had lost their sympathy for the striking workers because of their harsh attitudes.

He said the striking workers were harassing their colleagues who wanted to keep working.

"If it weren't for the company, the locals would have attacked the workers themselves," he said, explaining that Vico had persuaded the locals to keep out of this affair.

Sidick said that the striking subcontractor's workers were demanding a salary increase equal to that of Vico's workers.

Furthermore, the workers wanted assurance that they would not be dismissed once their contract expired, he said.

"These are indeed difficult demands," Sidick added.

However, he said the company expected negotiations with the workers to start next week.

He said a tripartite negotiation would be held that included the Indonesian Prosperity Labor Union (SBSI), which was organizing the strike.

SBSI is also the labor union that forced giant coal mining company PT Kaltim Prima Coal (KPC) to close down its operations in East Kalimantan.

KPC's operation remains shut despite high level efforts by the company, SBSI and the government to reach an amiable agreement.

"We hope we can resolve this problem quickly and in a peaceful manner," Sidick added. (bkm)