PGN Initiative Optimizes LNG to Assist Industrial Energy Needs in Facing Geopolitical Risks | Pertamina

PGN Initiative Optimizes LNG to Assist Industrial Energy Needs in Facing Geopolitical Risks

Jakarta, April 26, 2024 - Gas Subholding PT Pertamina (Persero), PT Perusahaan Gas Negara Tbk (PGN), is undertaking an initiative to optimize liquefied natural gas (LNG) products. Besides meeting industrial needs amid the continuous decline in natural gas production, the penetration of this future energy product is also part of the strategy to remain resilient in facing current global geopolitical risks.

"There is one initiative currently being pushed by PGN, which is market penetration with LNG. Certainly, this needs to be considered by the industry if there are industrial needs not met through pipeline gas," stated Rosa Permata Sari, Director of Strategy & Business Development of PGN, on 4/26/2024.

According to her, this is an anticipation for the natural gas production decline and is part of PGN's commitment as an energy provider to continue assisting in meeting the customers' energy needs, especially in the industrial sector. Thus, it is expected to continue growing amidst the current dynamics.

It follows the information from the Ministry of Energy and Mineral Resources in March 2024, which announced that Indonesia's natural gas reserves are more than its oil reserves. However, Indonesian gas production will decline in the coming years due to the natural decline of existing gas wells.

From the hearings conducted by PGN, Rosa assessed that many players in the industrial sector have understood this situation and realize that LNG, besides having advantages in terms of security, also offers more competitive costs compared to other fossil fuels, thus being the right solution to keep the industry growing in a situation of natural decline and facing the challenges of geopolitical dynamics.

In many countries, LNG is used as an alternative energy, which plays a significant role in the industrial sector and positively impacts the country. Through proper management and optimization, LNG can also become a sustainable and environmentally friendly energy source to support the Net Zero Emission Target in 2060.

Considering the significant role of LNG, Rosa explained, it is also important for Indonesia to have LNG trading facilities for exports and imports. Import anticipation is still necessary if domestic LNG availability does not meet the demand.

Therefore, PGN is prepared by establishing specific entities that would conduct cross-border LNG trading. "We also need to build Hub infrastructure, planned at several points, one of which is in Lamong, East Java. Then there is also in Aceh, in Arun, and in Bontang," Rosa said.

She stated that it is important to plan and implement relevant energy policies following the situation to maintain the country's economic strength. "With the geopolitical conditions today and the existence of several energy policies, we need to do good planning involving not only PGN but also regulators."

PGN has prepared a long-term plan for the next 5 to 10 years regarding the long-term infrastructure plan to strengthen its commitment to meet the customers' energy needs. "So, we expect the logistic price or infrastructure costs to provide a more competitive energy," she added.

Vice President of Corporate Communication of PT Pertamina (Persero) Fadjar Djoko Santoso added that PGN's initiative in penetrating the clean energy market with LNG reinforces Pertamina's role in maintaining national energy resilience while also supporting energy transition and decarbonization targets. "LNG is expected to become an energy alternative to mitigate fluctuating industrial and geopolitical dynamics," Fadjar said.

Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social & Governance (ESG) implementation across all Pertamina's business lines and operations.**