PGN Celebrates 59th Anniversary, Reinforces Strategic Plans to Boost Natural Gas Role in Energy Transition

Jakarta – PT Perusahaan Gas Negara Tbk (PGN) celebrated its 59th anniversary on May 13, 2024. On this milestone, PGN, as Pertamina's Subholding Gas, reaffirmed its commitment to expanding the utilization of natural gas as a transition energy source. The company has outlined strategic plans to strengthen this role amid a dynamic market environment.

"In this stage of its journey, PGN is expected to become stronger and more determined to build both pipeline and beyond-pipeline infrastructure, including LNG trading. In the future, PGN will play a key role for Pertamina in the energy transition. If we look at the energy trilemma, natural gas holds great promise in this transition period," said Pertamina's Director of Logistics & Infrastructure, Alfian Nasution, during the 59th anniversary celebration of PGN on May 13, 2024.

The opportunities ahead are vast, especially with Pertamina’s Long-Term Business Plan (RJPP), which forecasts significant growth in gas production in the upstream sector, and PGN is expected to capitalize on this.

"PGN is also expected to synergize more with other subholdings, such as Subholding C&T, to reduce LPG imports. Several pilot projects have already been initiated in this direction, and the goal is to expand the gas network while substituting subsidized LPG (3 kg) with natural gas distribution. Thus, the strategy for the gas transition can become more tangible," added Alfian.

In line with this vision, PGN's President Commissioner, Amien Sunaryadi, urged PGN Group to strengthen its presence in the public eye by expanding natural gas infrastructure connections across the country. "Let's increase the number of gas network connections moving forward. Not all areas are easily accessible by pipelines, which is why gas distribution should also involve beyond-pipeline solutions, such as CNG," he said.

Amien emphasized the importance of boosting CNG utilization for quality household gas, as household gas connections (jargas) remain a top priority. "We must build jargas on a large scale to establish PGN as the market leader in CNG, and make PGN more visible to the public," he added.

PGN's President Director, Arief Setiawan Handoko, expressed optimism about the company's natural gas development in Indonesia, which is supported by the Ministry of Energy and Mineral Resources' (ESDM) data showing that fossil fuels, including oil and gas, will remain critical in securing the national energy supply. Specifically, natural gas is expected to serve as a transition energy source toward Net Zero Emission (NZE) by 2060. PGN is committed to prioritizing the integration of natural gas infrastructure development and maximizing the use of high-integrity natural gas.

"To capitalize on the economic recovery, accelerate the energy transition, and develop future business segments that support carbon emissions reduction, PGN is taking strategic steps under three business development pillars: Grow, Adapt, and Step-out (GAS). The Seven National Gasification Programs will continue under the Grow pillar, while new programs such as LNG Trading, biomethane, CO₂ transport, and gas downstream will fall under the Adapt and Step-out pillars," explained Arief.

The industrial sector is expected to remain the main driver of natural gas demand, as the industry and economy are expected to continue growing. The household segment is also expected to grow, with a target of adding 117,000 new household connections in 2024.

Furthermore, PGN is diversifying its business by developing subsidiaries such as LNG Hub Arun, expanding clean and renewable energy businesses, and optimizing upstream activities.

PGN is also working on several projects for LNG regasification and mini LNG to supply areas not covered by pipeline networks. These efforts are part of the long-term strategy to strengthen natural gas supply in the future. Additionally, PGN will develop new businesses that primarily support NZE, including biomethane, petrochemicals, hydrogen, and CO₂ transport.

Currently, PGN manages a natural gas pipeline network of approximately 12,692 km, a 10% increase from 2022, adding 1,167 km. The company also operates four LNG terminals. Through this infrastructure, PGN has distributed natural gas to 825,856 household customers, 3,103 industrial and commercial customers, and 1,976 small customers.

"We are optimistic that our performance will remain strong in the coming years, supported by the stable domestic economy. We will continue to adhere to our key strategies while implementing risk management systems, internal controls, and disciplined financial management," said Arief.

In executing these strategic steps, PGN acknowledges the challenges it will face, but the company remains committed to ensuring that its natural gas business is managed based on sustainability principles and good governance.

"PGN is committed to achieving energy independence in Indonesia during the energy transition by strengthening gas supply and expanding natural gas infrastructure. PGN is also prepared to implement ESG and green energy initiatives by selecting optimal technologies for energy diversification and transitioning to renewable energy," concluded Arief.

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