Participating in the Global Event, Pertamina International Refinery Signs Head of Agreements Nunukan Area Natural Gas Development Efforts
Bali, December 2, 2021 – PT Refinery Pertamina Internasional (PT KPI) officially signed the Head of Agreements (HoA) related to the Gas Sales and Purchase Agreement (PJBG) in the Nunukan Working Area in the 2nd International Convention on Indonesian Upstream Oil and Gas (IOG) global event 2021. The HoA is a milestone that begins the process of assessing the plan for the construction of a methanol refinery as an effort to optimize the supply of natural gas in the WK Nunukan. The agreement signed in the IOG international convention regulates the cooperation between PT KPI, PT Pertamina Hulu Energy-Nunukan Company (PT PHE-NC), and PT Karya Mineral Jaya (PT KMJ).
The President Director of PT KPI, Djoko Priyono, who was present to sign the HoA, revealed that the stages of the master agreement served to bridge the intentions of the parties in preparing and signing the Gas Sale and Purchase Agreement (PJBG) for the Nunukan Working Area. “This HoA is the basis for PHE-NC's plan to supply natural gas to meet the needs of PT KPI and PT KMJ. The natural gas refers to the Badik and West Badik well fields, one of the fields from the Nunukan working area," said Djoko Priyono. The natural gas reserves in the two fields are proven to reach 60 MMSCFD.
PT KPI's Corporate Secretary, Ifki Sukarya, explained that the signing of the HoA is an important step related to the initial plan for the construction of the Methanol Refinery to reduce the current account deficit of Methanol products which will be absorbed in the petrochemical industry, FAME, and gasoline blending components. “At least to produce 630 KTPA of methanol, it can be obtained by processing 60 MMSCFD of natural gas from the Badik and West Badik fields. To produce high-value Methanol products, the Methanol Refinery Unit will have to be able to carry out a "reforming process" which consists of a purification process to clean gas from sulfur, formation of syngas, and purification of Methanol," explained Ifki.
To achieve this vision, a series of further assessments are needed to ensure the feasibility of the project. "The synergy between PT KPI, PT KMJ, and stakeholders will continue to be carried out after the PJBG through the study stage," explained Ifki Sukarya. Further steps that need to be carried out include a joint study between PT KPI and PT KMJ, a PHE-NC study related to gas supply, as well as the preparation of PT KPI and PT KMJ for the business cooperation scheme to build a methanol refinery. "A series of assessments will of course be carried out to ensure the feasibility of the project before proceeding to the stage of discussing the formation of a joint-venture or joint venture for the Methanol refinery project in Nunukan," said Ifki Sukarya.
Ifki Sukarya further revealed that the HoA carried out between PT KPI and PT PHE-NC as a subsidiary of Pertamina is proof of Pertamina's upstream-downstream business synergy. "Later on, PHE-NC as an upstream subsidiary of Pertamina and the Nunukan Working Area Contractor will be tasked with supplying gas from the Nunukan Working Area to fulfill gas needs to both PT KPI and PT KMJ. This shows Pertamina's business strategy that is increasingly synergistic from upstream to downstream," said Ifki.
The Badik and West Badik fields which are proven to have natural gas reserves of 60 MMSCFD are one of the fields managed by PHE-NC in the Nunukan Working Area. As a manager in the Nunukan Working Area, PHE-NC is committed to increasing proven natural gas reserves from other field wells in the Nunukan Working Area. "This agreement also opens space for PHE-NC to prioritize gas supply to PT KPI and PT KMJ if there are new natural gas reserves from other fields in the Nunukan Working Area. Of course, this is an exciting thing and this upstream to downstream synergy can further spur the development of petrochemical supply in Indonesia, especially for methanol products, "explained Ifki.
PT KPI's Corporate Secretary, Ifki Sukarya continued that IOG's momentum became a strategic moment in supporting the efforts to develop natural gas from the Nunukan Working Area. “IOG is our way to go global, considering that this event involves the active participation of the domestic and international oil and gas business sectors. Through this event, we introduced PT KPI's business roadmap and received a positive response. We hope that the support of the stakeholders present at IOG will also support the sustainability of the Methanol refinery development program in Nunukan. This is following our aspiration to produce Gasoline substitution with A20, which contains 15% methanol and is in the process of being studied,” said Ifki.
The IOG Convention 2021 is a global-scale event organized by SKK Migas to attract investment from various upstream oil and gas industry players. This event is expected to encourage the collaboration of all stakeholders to strengthen the synergy of a sustainable upstream oil and gas industry. "PT KPI's participation in this global event proves that as the parent company for the downstream sector, PT KPI has an important role" strategic role in supporting the sustainability of various industries, including the upstream sector. Going forward, PT KPI will continue to strengthen the role of synergy with stakeholders from various industries to support the resilience of Indonesia's refinery and petrochemical sectors," concluded Ifki.**