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T Pertamina Gas (Pertagas), a subsidiary of state-owned oil and gas giant Pertamina, sealed on Wednesday an agreement with fertilizer firm PT Petrokimia Gresik on gas transportation through the East Java gas pipeline.

Under the deal, the volume to be transported will be 85 million standard cubic feet per day (mmscfd). The gas will come from the MDA and MBH fields operated by Husky CNOOC Madura Limited and will be used to feed Petrokimia Gresik'€™s Amoniak-Urea II, which is scheduled to begin operation in 2017. Petrokimia and Husky previously established a gas-selling and purchase agreement.

The deal on gas transportation will be valid from 2017 until 2026.

'€œWe will maintain the reliability of our pipe and expect there to be no technical problems in delivery. We will use our existing pipe and are therefore expecting not to need to increase the toll fee,'€ Pertagas president director Hendra Jaya said.

The deal adds to a previous cooperation agreement between Pertagas and Petrokimia Gresik in which the latter received around 60 mmscfd for its existing plant.

'€œGiven the support from Pertagas, we are optimistic that our Amoniak-Urea II plant will operate well. The additional fertilizer production of Petrokimia Gresik is expected to strengthen Indonesia'€™s food security,'€ Petrokimia Gresik president director Hidayat Nyakman said.

The Amoniak-Urea II plant will have a production capacity of 2,000 metric tons per day of ammonia and 1,725 metric tons per day of urea-fertilizer.