PT Perusahaan Gas Negara Tbk (IDX: PGAS), have signed an agreement to supply liquefied natural gas (LNG) and develop infrastructure for 52 power plant of PT Perusahaan Listrik Negara, including jetty and unloading facilities - Photo by MEMR Office

JAKARTA (TheinsiderStories) – Publicly listed, PT Perusahaan Gas Negara Tbk (IDX: PGAS), have signed an agreement to supply liquefied natural gas (LNG) and develop infrastructure for 52 power plant of PT Perusahaan Listrik Negara (PLN), including jetty and unloading facilities, said the CEO today (10/6).

The CEO, Suko Hartono, said the power plants was estimated will generating capacity of around 1.8 giga watts. In addition, the director general at the ministry of energy and mineral resources (MEMR), Rida Mulyana, revealed this project was implemented to improve the trade balance and to support the energy conversion program from fuel to natural gas.

“The benefit for both parties is realizing the cheaper gas compared to HSD (high speed diesel),” he said by adding the initial stage, Perusahaan Gas Negara will carry out the LNG for natural gas-fired power plant in Sorong, Tanjung Selor, and Nias.

Last August, the company has signed the gas supply for fertilizer producer, PT Pupuk Indonesia. Both parties signed a delivery contract 37 billion british thermal unit per day (BBTUD) with the implementation of a gas price of US$6 per MMBTU until 2021.

At the same day, its unit, PT Pertagas Niaga, also signed the same deal with other fertilizer producer, PT Pupuk Iskandar Muda, amounting to 54 BBTUD until May 2033. The needs for the the unit of PT Pupuk Indonesia will be supplied from Medco gas sources and carried out through the Group integrated operating mechanism.

“Reviving domestic fertilizer production with the availability of sustainable natural gas will support agricultural productivity for national food security,” said Nicke Widyawati, CEO of PT Pertamina on August 31.

Earlier, the issuer and several major producer has signed the fourth phase of the Letter of Agreement with upstream producer partners. This policy provides more space for certain industries and the electricity sector to enjoy cheaper gas prices and helps to efficiently use energy in the production process.

Perusahaan Gas Negara as one of the buyers signed an agreement with ConocoPhillips Grissik Ltd., and Minarak Brantas Gas Inc. In details, for SSWJ Contract have a volume of 355 BBTUD. Then, for Batam Contract 1 (industry) with a volume of 18 BBTUD.

Still with ConocoPhillips, for Batam Contract 3 have a volume of 33 BBTUD and for the needs of the Dumai Contract 6.3 BBTUD. While, Minarak Brantas Gas Inc., and Pertagas Niaga and the company with a volume of 2.5 BBTUD. Hartono said, that with the implementation of the Minister of EMR Decree Number 89K of 2020 and Number 91K of 2020 have seen a positive growth to the industry.

EMR minister, Arifin Tasrif noted, in 2019, the gas consumption was recorded at 64.9 percent, and will continue to increase to 68 percent in 2024. Currently, the need for natural gas products is increasing, such as the use of 30 percent of biofuel (B30) which requires methanol, which is a product of downstream natural gas.

Until first semester of 2020, the producer post a net profit US$6.72 million, dropped significantly compared to the previous year was recorded of $54.04 million. The revenues also dropped almost 18 percent to $1.47 billion from $1.79 billion in annual basis.

In the same period, PLN‘ net profit has subsided by more than 96 percent to Rp273.06 billion ($16.17 million) from a year gap posted of Rp7.35 trillion. The operating income is albeit slightly, from Rp137.52 trillion to Rp139.78 trillion in the first semester of 2020.

Written by Editorial Staff, Email: theinsiderstories@gmail.com