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Jakarta Post

PGN inks deal with fertilizer producers for cheap gas

  • Norman Harsono

    Jakarta

Jakarta   /   Fri, September 4 2020   /  01:00 am
A building owned by state-owned gas subholding company PGN (Courtesy of/State-owned gas subholding company PGN )

Two of Indonesia’s biggest fertilizer producers have signed deals to receive cheap natural gas as part of a long-delayed government incentive to push industry growth. PT Pupuk Kujang Cikampek and PT Pupuk Iskandar Muda (PIM), subsidiaries of fertilizer holding company PT Pupuk Indonesia, signed the deal for gas – a key ingredient in fertilizer production – with state-owned gas distributor PT Perusahaan Gas Negara (PGN) on Monday. Under the agreement, PGN will sell gas to the two companies at US$6 per million British thermal unit (mmbtu), cheaper than the domestic market price of around $8 per mmbtu. The price adjustment has been mandated by Presidential Regulation No. 40/2016. “This gas price adjustment completes a years-old issue over gas pricing and supplies for the fertilizer industry,” said Pupuk Indonesia president director Bakir Pasaman. Pu...