Customer Business Forum 2024: PGN Ensures Gas Supply Availability and Synergy in Natural Gas Planning for the Industrial Sector

Banten – PT Perusahaan Gas Negara Tbk (PGN) continues its efforts to meet the growing demand for natural gas, particularly from the industrial sector, prioritizing the sustainability of these industries while adhering to government policies.

“In the coming years, natural gas will play a significant role in line with economic growth and the strategy toward Net Zero Emissions (NZE). In a developing country like Indonesia, growth will occur across various sectors, including industry, necessitating the availability of energy. Indonesia has also committed to the global community’s efforts to realize clean energy, one of which involves natural gas,” explained Wiko Migantoro, Deputy CEO of PT Pertamina (Persero), on Wednesday, October 16, 2024, during the Customer Business Forum 2024 (CBF 2024).

Through the CBF 2024 forum, PGN demonstrated its confidence and optimism in maximizing the utilization of natural gas in Indonesia, reaffirming its commitment to prioritizing customers for the advancement of industry. “This forum aims to benefit customers overall, as they expect PGN to ensure gas supply for industrial sustainability. Moving forward, PGN will expand into eastern Indonesia with massive investments in clean LNG infrastructure, from upstream to downstream, as a way to reassure customers of consistent gas availability,” said PGN CEO Arief S. Handoko.

To meet customers’ natural gas needs and adapt to recent business dynamics, PGN has taken several steps, including optimizing gas uptake. For instance, LNG uptake in West Java has reached 60 BBTUD. The national natural gas service portfolio has shifted, with 60% now served by pipeline gas and 40% by LNG. PGN is committed to ensuring gas availability through active communication with regulators and stakeholders while intensifying infrastructure development to reach new markets.

“Demand for natural gas is continuously increasing. PGN is making every effort to provide pipeline gas by maintaining intensive communication with the government to allocate pipeline gas for industrial customers. The remaining demand will be met with LNG supply sourced from FSRU Lampung, Nusantara Regas, and Aceh,” emphasized Ratih Esti Prihatini, Commercial Director of PT PGN Tbk.

PGN is also accelerating infrastructure development to ensure natural gas from Sumatra can be distributed to West Java via the Dumai-Sei Mangke pipeline, SSWJ, and Cisem 2 pipeline. “PGN aggressively seeks to maximize gas uptake by industries to sustain their operations, particularly through LNG. LNG is becoming a preferred and significant energy source to support energy supply in the coming years, aligning with projected supply availability in new development areas, primarily offshore,” Ratih added.

The forum also served as a platform for dialogue on the pricing structure for natural gas in 2025. It was explained that the pricing mechanism would remain consistent with 2024, comprising pipeline gas prices and regasified gas prices. Regasified gas prices will remain dynamic, adjusting to LNG price dynamics based on formulas set by regulators and Indonesia Crude Price (ICP) conditions. This dynamic pricing mechanism is expected to provide accurate price signals and maintain competitiveness compared to liquid fuels (BBM).

“LNG pricing refers to the ICP determined monthly by the Minister of Energy and Mineral Resources. In practice, gas prices tend to fluctuate due to supply and external factors, causing prices to be either low or high, but still aligned with the ICP. This strategy will be implemented for 2025 and beyond, considering the dominant availability of LNG compared to pipeline gas. We sincerely hope the industrial sector continues to grow sustainably,” Ratih noted.

Finally, PGN reaffirmed its commitment to supporting domestic natural gas fulfillment, particularly for the industrial sector, which serves around 2,500 customers as of 2024. This number is projected to increase to 2,700–2,750 industrial customers in the coming years. Recognizing the growing societal demand for gas, LNG will be a cornerstone for ensuring reliability and availability in PGN’s natural gas distribution.

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