PGN LNG Indonesia and Hoegh LNG Lampung Agree to Optimize Commercial Cooperation & FSRU Lampung Utilization

Jakarta – PT PGN LNG Indonesia (“PLI”), a subsidiary of Pertamina's Subholding Gas PT PGN Tbk (“PGN”), and PT Hoegh LNG Lampung (“HLL”) have entered into a new agreement to further optimize their cooperation in managing the Floating Storage and Regasification Unit (FSRU) Terminal in Lampung. The agreement was signed on Monday, February 5, 2024, in Jakarta, with Nofrizal, President Director of PLI, and Irman Rumadja, President Director of HLL, representing their respective companies.

This agreement follows arbitration proceedings concerning the Lease, Operation, and Maintenance (LOM) Agreement for the FSRU Lampung that had been ongoing for several months. "The agreement is outlined in the Settlement Agreement, which includes the withdrawal of the arbitration case, and the parties will negotiate to establish a more optimal cooperation in the commercial aspects of the LOM Agreement," said Rachmat Hutama, Corporate Secretary of PT PGN Tbk, on February 6, 2024.

PT PGN LNG operates the FSRU (Floating Storage & Regasification Unit) Terminal in Lampung as part of an integrated natural gas infrastructure to supply gas to DKI Jakarta, West Java, South Sumatra, and Lampung. The FSRU Lampung is connected to a 24-inch diameter subsea pipeline extending 21 km to the Onshore Receiving Facility (ORF) in Lampung.

The ORF is systemically connected to the SSWJ (South Sumatra-West Java) transmission network at the Labuhan Maringgai station, as well as to the Lampung offtake station. Regasified LNG from the FSRU Lampung can be distributed to West Java, South Sumatra, and Lampung.

Regasification facilities are crucial for ensuring supply security, including flexibility, supply reliability, and continuity. With the "Merchant Business Model," PGN is able to ensure the reliability of supply without solely relying on pipeline gas by incorporating multiple supply sources such as pipeline gas, LNG, and, more recently, BioMethane gas.

Additionally, the LNG regasification facility functions as a supply point in the event of a spike in gas demand or a shortfall in pipeline gas supply, whether in the short or long term. This reflects PGN’s ongoing commitment to ensuring uninterrupted service to customers.

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