Both company's official signs the purchase agreement - Photo: Privacy

JAKARTA (TheInsiderStories) – Indonesia’s gas producer and distributor, PT Perusahaan Gas Negara Tbk (IDX: PGAS) signed a purchase agreement to sell liquefied natural gas (LNG) to Beijing-based oil and gas enterprise, China Petroleum & Chemical Corporation (Sinopec) starting 2020. It marks an important milestone for the company to play its role globally.

“We have reviewed the opportunity to take part and develop the gas and LNG infrastructure along the value chain, ranging from ownership in the areas of liquidation, regasification, ships, energy regeneration or transmission infrastructure, pipelines, and city gas facilities,” said Syahrial Muktar, the director at the company, on Monday (11/11).

Sinopec required shipments of at least six cargoes of LNG in 2020, Muktar said, and the first shipment for Sinopec is expected in early January. It can be fulfilled due to in mid-2019, the company tasked by its parent, PT Pertamina to manage the full end-to-end LNG business.

Muktar explained that China is a country with great potential due to the variety of business opportunities that can be explored. Based on energy needs to support economic growth in China, energy imports are inevitable, he said.

China needs global energy sources to fill the gap between energy production and increasing consumption. The condition is the right thing where PGAS can help Pertamina’s LNG portfolio sales and carry out the company’s role as a gas sub-holding, he adds.

“We are very enthusiastic to build cooperation with Sinopec, one of the biggest energy companies in China. We believe that our goal to sign an agreement is the beginning of what we can collaborate forward. Hopefully, we can explore the potential of LNG sales and the further development of the LNG infrastructure, Muktar said.

In line with efforts to expand services and portfolios at the global level, to maintain national energy security, especially in serving domestic natural gas needs for all sectors, currently, PGAS has provided LNG in various markets, not only as energy and industry but also for commercial, retail and household.

As a sub-oil and gas holding, currently, PGAS’ total gas pipeline network is more than 10,000 kilometers. The company also operates two FSRU, one land-based regasification terminal, 64 gas refueling stations, and four mobile refueling units.

The company also has its energy mix target by 2024 to build a number of new infrastructures including transmission and distribution pipelines of 528 kilometers and 500 kilometers respectively.

The company will also build seven LNG filling stations for ships, five FSRUs, 3.59 million household connections and 17 LNG facilities to supply electricity needs and reach the geographical area of ‚Äč‚ÄčIndonesia. In 2025, PGAS aims to be able to operationalize 4.7 million household connections.

To finance the projects, the state-owned company prepared capital expenditure US$700 million in 2020. The state-owned enterprises have a mandate from the government to deploy the 78,000 household gas networks in 2019. To date, the number of household gas networks are reached 564,000.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com