MOJOKERTO, Jawa Timur: At least five foreign investors and several local companies in Ngoro Industrial Park, Mojokerto suspended their expansion plan due to lack of gas supply.
General Manager of Ngoro Industrial Park--owned by PT Intiland Development Tbk, Wihardi Hosen said the industrial park is facing gas shortage to meet their expansion, although there is no significant reduction in nowadays supply.
“Consequently, many companies must suspend their expansion. Even worse, five foreign investors that had almost signed a contract canceled the plan because there is no guarantee of gas supply from PGN and Santos," he said last week.
They are three ceramic producers and other two companies come from Taiwan and Japan. In fact, a ceramic manufacturer requires relatively large supply of gas.
Today, the gas supply need in the industrial park goes to 10 million cubic per day. At least 5 more million cubic gas per day is needed to facilitate the expansion.
“The additional supply isn’t included yet for new investment or companies. So, the additional supply only covers the existing companies in the bonded area,” he said.
About 90% of total companies operated on 250 hectare land of Ngoro I Industrial Park are foreign investors from East Asia, including South Korea, Taiwan, Japan, and Europe.
Previously, PT Perusahaan Gas Negara Tbk had promised to supply more gas commencing in the mid of 2012, but no information available on the exact amount. Industrial players are waiting for Provincial Government of East Java's initiative to import more gas.
The data of Ministry of Industry showed the contract of gas supply for East Java industries this year is only 193 Million Metric Standard Cubic Feet per Day compared to total estimated needs to 446.45 MMscfd.
The issue on gas shortage in East Java emerged due to breakage of Maleo-Madura-based mobile oil production unit operated by Santos in March 2011.
The field produces about 120 MMscfd of natural gas channeled to East Java-based industries through pipes owned by PGN.
Wihardi affirmed that a security on natural gas supply is essential for industries' continuity and growth. There is an option to supply gas from a private party and Intiland is now reviewing the option.
The private party has communicated its readiness to supply 10 MMscfd, but in the more expensive price compared to PGN's. "We expect the price disparity may get narrowed.”
Intiland has started developing Ngoro II Industrial Park. For the first stage, Ngoro II Industrial Park is utilizing 215 hectare land that continues to extend to 300 hectare.
If the gas supply issue could be controlled, Intiland is optimistic Ngoro II Industrial Park will reach full occupancy within of 3 years from now. (HERY LAZUARDI/(t01/ags)