PGN Pertamina’s Gas Subholding Collaboration with EMCL, HCML, Petronas, & Pertamina EP Strengthens Natural Gas Supply Resilience

Bali, September 23, 2023 - PT PGN Tbk, as Pertamina's Gas Subholding, with EMCL, HCML, Pertamina EP, and Petronas, is collaborating to enhance the national natural gas supply resilience. PGN is taking this initiative following the company's commitment to maintaining energy supply resilience. These four agreements’ signing was executed by the Director of Strategy and Business Development of PGN, Harry Budi Sidharta, and the partners’ main management, witnessed by the Head of SKK Migas, Dwi Soetjipto, main management of KKKS, and CEO of PGN, Arief Setiawan Handoko, during the IOG 4th 2023 event in Nusa Dua, Bali, (22/9/2023).

"PGN is committed to ensuring customer satisfaction in natural gas service by maintaining a sustainable gas supply. Today marks a tangible milestone in PGN's efforts alongside upstream sector stakeholders to uphold a sustainable supply commitment. Gas supply resilience is of paramount value to all customer segments and the sustainability of the natural gas business. Therefore, PGN is fully committed to ensuring the resilience of this natural gas supply and fundamentally adheres to the GCG (Good Corporate Governance) principles in its commercialization," said the CEO of PGN, Arief Setiawan Handoko.

Following the increasing demand for natural gas in the Eastern Part of Java and Central Java, to maintain gas supply resilience for these regions, the PGN Group has signed two agreements with Husky CNOOC Madura Ltd (HCML) and Exxon Mobile Cepu Ltd (EMCL). PGN - HCML has signed a PJBG (Gas Sales and Purchase Agreement) with a volume of 5 MMSCFD for ten years from the 3M field in East Java.

PGN, through its affiliate PT Pertagas, has also signed a Head of Agreement (HOA) with EMCL for a gas volume of 14 MMSCFD for ten years, which will be used by PGN and its affiliates to strengthen gas supply resilience and fulfill the gas consumption needs in East Java, thus ensuring gas availability in the long term.

"We welcome cooperation with our upstream partners as strategic allies of PGN for resilience in East Java, Central Java, North Sumatera, and surrounding areas. Our optimism is also high alongside all upstream stakeholders to enhance contributions to gas supply, especially in the energy transition era, in line with our shared commitment to generate a multiplier effect on the economy and environmentally friendly energy resilience," added Arief.

Furthermore, PGN and the Malaysian subsidiary of Petronas, PC Ketapang II Ltd (PCK2L), have signed a Memorandum of Understanding to utilize gas supply from the Ketapang Work Area with a ramp-up capacity of 5 – 20 MMSCFD, which will be adjusted based on evaluation results.

"PGN has a natural gas demand for 2024 and beyond, with an indicative volume of 5 MMSCFD for industrial and electricity needs in East Java, Central Java, and surrounding regions. From PCK2L, it is conveyed that there is a potential gas volume from the Ketapang Work Area that can be utilized by PGN. Therefore, PGN intends to utilize the gas supply from the Ketapang Work Area in the long term for optimization by PGN," expressed Harry Budi Sidharta, Director of Strategy and Business Development of PGN.

Harry further explained that they, along with PCK2L, will conduct a deeper assessment regarding natural gas potential utilization from the Ketapang Work Area for optimization, enhanced supply reliability, and fulfilling PGN's gas needs.

In addition to PCK2L, PGN, with Pertamina EP, signed a Gas Sales and Purchase Agreement (PJBG) for Pertamina EP Medan with a supply volume of 3.5 – 4 BBTUD. This step follows the Joint Agreement previously signed by PGN with Pertamina EP, as well as to increase supply in the North Sumatera region and its vicinity.

The supply from Pertamina EP Medan is needed to fulfill the growing demand for natural gas. With this, PGN has a reliable supply to serve existing customers and expand natural gas services in the North Sumatera region.

These MOUs and PJBGs signing represents a concrete step toward achieving energy resilience goals and driving economic progress through natural gas utilization. The strong collaboration between PGN and its upstream partners is expected to sustain the natural gas supply chain.

Fadjar Djoko Santoso, Vice President of Corporate Communication of PT Pertamina (Persero), expressed that PGN's collaboration aligns with the government's program to optimize domestic natural gas utilization in the current energy transition era.

"PGN, as Pertamina's Gas Subholding, has demonstrated its readiness to fulfill its strategic role in providing national gas," said Fadjar.

Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social & Governance (ESG) implementation across all Pertamina's business lines and operations.