"Right now, we are participating in a tender for the purchase of the Exxon gas field in NAD to assure a supply of gas to PT Pupuk Iskandar Muda (PIM)," the company`s president director, Arifin Tasrif, said at the launching of PT PHIC name and logo, which is replacing the old PT Pusri Holding name and logo here on Wednesday.
PT PIHC is a new fertilizer holding company that merges five fertilizer companies, including PT Pupuk Kalimantan Timur, PT Pusri Palembang, PT Petrokimia Gresik, PT Pupuk Kujang and PT Pupuk Iskandar Muda.
Arifin said the Exxon gas field was sold because it was no longer considered economical by the oil company that exports liquified natural gas to various countries, such as Japan and South Korea.
He said the Exxon LNG contracts to those countries will also expire by 2014.
"However, the gas reserves left are still considered economical for supplying the raw material needed by PT PIM," he said.
In view of that, he said PT PIHC, in cooperation with state-owned gas company PT PGN and private oil company PT Medco, would set up a consortium to bid for the field.
State enterprises minister Dahlan Iskan has expressed support for the PT PIHC`s move. He has even proposed buying the Kepodang gas field in the Muria Block in the Java Sea, which is now being managed by Petronas.
"When I was the president director of state-owned electricity company PT PLN, I had already planned to acquire the Kepodang field. If PT PHIC could buy the field, that would be better because there would be a guaranteed supply of gas as the main raw material and the price of gas would not rise, so in terms of business it would be beneficial," he said.
Dahlan estimated the investment needed to acquire Kepodang, which he said has never been explored by Petronas, reached about Rp30 trillion. He said he believed banks would support it.
"I support corporate actions like that. It is up to them (PHIC) to decide. It is a mere business-to-business deal," he said.
Dahlan also expressed support for PIHC`s efforts to convert from natural gas to coal to power electricity plants and use the gas as a raw material for its production.
He even proposed a swap with electricity from PT PLN, which uses gas for its plants.
"So, PLN electricity produced using gas would be supplied with coal by PIHC and the gas used by PLN would be shifted to PHIC for producing fertilizers," he said.
Arifin said gas to coal conversion projects for power generation has produced an added value of up to US$286.1 million a year, with potential gas savings of 192 million cubic feet per day (mmscfd). ***2***
(T.SYS/B/KR-BSR/O001) 18-04-2012 14:43:51