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Fertilizer factory worth $1.5b to be developed in Papua
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A farmer spreads fertilizer to the verdant paddies in Mujur village, Cilacap, Central Java. (JP/Agus Maryono)
T
rade Minister Airlangga Hartarto has lauded a plan by state-owned fertilizer company PT Pupuk Indonesia and Germany based Ferrostaal to develop a fertilizer factory in Bintuni Bay, West Papua.
The two companies have agreed to carry out a feasibility study for the US$1.5 billion project.
“The two parties have a commitment to provide the government with comprehensive data related to the petrochemical factory,” the minister said as reported by kontan.com on Monday.
(Read also: Pupuk Indonesia intensifies research to strengthen food security)
Airlangga’s statement was made after witnessing a memorandum of understanding (MoU) signed by Pupuk Indonesia investment director Gusrizal and Ferrostaal CEO Klaus Lesker in Dusseldorf, Germany, on Jan. 21.
The plan to develop a fertilizer factory in West Papua is part of President Joko “Jokowi” Widodo’s plan to distribute development fairly nationwide. Bintuni Bay is known for its gas resources as raw material for the fertilizer. “We will support the allocation of gas with good prices,” he said.
The fertilizer producer is among industrial sectors that will enjoy the gas-price cut introduced by the government, as stipulated in Presidential Regulation No. 40/2016 on natural gas prices.
The potential of the natural gas in the area that has been identified reaches 23.8 trillion standard cubic feet (tscf). New gas reserves with potential between 6 tscf and 8 tscf has already been found.
Meanwhile, Gusrizal assured that his company was interested in developing a fertilizer factory in Bintuni Bay by optimizing the use of gas resources in the region. (bbn)
