PT Perusahaan Gas Negara Tbk (IDX: PGAS) has signed a gas sale and purchase agreement with and state-owned fertilizer manufacturer - Photo by the Company

JAKARTA (TheInsiderStories) – Indonesian gas producer and distributor, PT Perusahaan Gas Negara Tbk (IDX: PGAS) has signed a gas sale and purchase agreement with and state-owned fertilizer manufacturer, the company announced today. 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, at the signing ceremony on Monday (08/31).

Early August, the issuer and several major producer has signed the fourth phase of the Letter of Agrement 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. President Director of PGAS, Suko 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.

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