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5 PGN LNG Business Initiatives Towards a Sustainable Energy Transition

Apr 18, 2022

PT PGN LNG Indonesia (PLI), part of the Pertamina Gas Subholding, has developed five initiatives to divesify Liquefied Natural Gas (LNG) as sustainable transitional energy.

The majority of natural gas is needed by the industrial and power generation sectors. Gas supply is also higher in the New Renewable Energy scenario due to the increase in gas consumption in the power generation sector to fulfill the electricity demand surge due to electric vehicles.

Therefore, in the current energy transition period, PLI has developed an LNG infrastructure initiative to accelerate the energy transition process. In addition, the value of LNG emissions is 40% lower than coal.

The first initiative carried out by PLI was the management of the Lampung FSRU to maintain the natural gas distribution system reliability in the South Sumatera West Java (SSWJ) pipeline. When there is a supply disruption, the Lampung FSRU can distribute LNG to SSWJ. Therefore, it can maintain natural gas supply as needed.

“The Lampung FSRU helps increase natural gas sales volume to PLN Muara Tawar by 20 to 50 BBTUD,” explained President Director of PLI, Nofrizal (12/04/2022).

“The second initiative is to support the West Papua government in providing LNG infrastructure for power plants in Jayapura, Serui, Nabire, Biak, and Manokwari. We partner with a BUMD in West Papua, PT Padoma,” explained Nofrizal.

In this case, it helps run the LNG business by forming JV PLI and PT Padoma, namely PT Padoma Global Neo Energi (PGNE), and there is an LNG allocation of 20 BBTUD for 5 locations.n

Nofrizal continued that the LNG project in West Papua is also part of PLI’s steps to help Papuans enjoy their natural resources, build an LNG business, and provide assistance with commercial, technical design, legal, and so on.

“Hopefully, in late 2023 or early 2024, we will be able to provide revenue for PGNE, which will also be revenue for West Papua. PGN assists in LNG supply and infrastructure,” Nofrizal continued.

The third initiative is LNG as a rail fuel. From the static test results, with a dual fuel diesel and LNG system, higher efficiency is obtained than other fuels. Then in the dynamic test with the Jakarta-Surabaya Dharmawangsa train route, the travel efficiency is also higher than other fuels.

“The key factor for LNG as train fuel is the LNG source. We hope to soon realize an LNG terminal on Java island. Thus, LNG can be used by KAI as fuel and part of ESG’s commitment to reduce emissions commercially,” explained Nofrizal.

The fourth initiative is LNG for the port area, and this is one of the future businesses of Gas Subholding. There is PP No. 31 of 2021 regarding the implementation of IMO 2020 related to emission standards with a maximum sulfur content of 0.5%.

Most ships still use fuel that produces carbon and sulfur emissions above 0.5%. Therefore, an opportunity is taken to provide fuel with lower emissions and 0% sulfur. One of the segments taken is when the ship is in the port area and requires electricity.

“First, we will use an LNG Power Barge with an onboard electricity generator with LNG energy sources. It can be said as a power bank on board. The second is the LNG Shore Connection to meet the electricity needs of commercial vessels when mooring at the port,” explained Nofrizal.

Estimated electricity costs on HSD-fueled ships are 4500 to 5000 IDR/KWH. By using electricity from the power barge, merchant ships will produce zero emissions and save 10-30% on electricity costs.

The fifth initiative is the Operation & Maintenance of LNG Facilities to increase value creation by becoming an LNG infrastructure operator, both within the Gas Subholding Group and in the Pertamina Group. It will increase revenue and develop the capacity of Gas Subholding in the management and maintenance of LNG facilities.

“These initiatives in the LNG business depart from LNG opportunities in the future, where LNG has an important role in the transition to net zero-emission in 2060,” stated Nofrizal.

Image credit Pertamina