PGN and Likuid Nusantara Gas Sign MoU to Explore LNG Cooperation in East Java

Jakarta (07/08/2024) – PT PGN Tbk, as Subholding Gas of PT Pertamina, has signed a Memorandum of Understanding (MoU) with PT Likuid Nusantara Gas (“PT LNG”) to explore potential cooperation in Liquified Natural Gas (LNG) in East Java. The MoU was signed by Rosa Permata Sari, Director of Strategy and Business Development of PGN, and Wira Rahardja, President Director of PT Likuid Nusantara Gas, representing PT LNG.

Under this MoU, PGN and PT LNG have agreed on a collaboration that includes LNG buying and selling activities, which PGN is currently engaged in to meet domestic natural gas needs. To support the domestic market penetration, a joint study will be conducted on the development of natural gas infrastructure or an LNG terminal in Pasuruan, East Java, as well as other potential activities related to the operation and maintenance of natural gas or LNG facilities and infrastructure.

PT LNG is an integrated energy company with experience in the natural gas sector. In September 2023, PT LNG secured a potential domestic gas supply allocation, which is planned to be commercialized through LNG mode.

"We hope that the potential cooperation signed today in the form of an MoU can be realized into more concrete steps. We see alignment between PT LNG’s goals and PGN’s efforts, as well as today’s business ecosystem. There is a significant demand for natural gas on Java Island, but supplying gas to certain areas still requires various modes of transportation, not only pipelines but also other modes like CNG and LNG," said Rosa Permata Sari, Director of Strategy and Business Development at PGN.

Rosa further stated that retail growth has been developing quite rapidly. “As for pricing, the market seems ready to accept LNG penetration. We saw the market’s ability to absorb LNG since May. This means the LNG ecosystem has been established,” she explained.

Rosa emphasized that the key to this cooperation is the reliability of natural gas and its infrastructure. It is expected that PGN and PT LNG's joint efforts will provide reliable natural gas energy that can be accepted by all sectors of society.

According to Wira Rahardja, President Director of PT LNG, energy subsidies or dependency on LPG imports are significant. Therefore, in this case, both businesses, the government, and state-owned enterprises need to collaborate to reduce the government's burden. "We see that cooperation with PGN is a strategy we cannot overlook. With the support from PGN Group and, of course, the government, we believe that this LNG project can contribute to the government and help realize our goal of reducing the LPG subsidy burden, particularly regarding imported LPG," said Wira.

PGN strives to continuously provide reliable natural gas supplies to its users across various regions in Indonesia. With this initiative, it is expected that the optimization of national natural gas production in various locations and isolated markets will become more accessible to natural gas.

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