Strengthening the Synergy of Pertamina Group, PGN & PIS Increase LNG Utility

Jakarta, June 25, 2021 - PT Pertamina (Persero) continues to encourage the acceleration of the gasification program as a strategic initiative to welcome the energy transition through the synergy of Pertamina Subholding in increasing the utilization of domestic Liquefied Natural Gas (LNG).

This effort is realized through a collaboration between PT Perusahaan Gas Negara (Persero) - PGN as Subholding Gas and PT Pertamina International Shipping (PIS) as Subholding Shipping and Integrated Marine Logistics Company. It is an effort to optimize Pertamina's integrated management and supply of national Liquified Natural Gas (LNG) integrated. The synergy was marked by the signing of the Head of Agreement (HoA) of cooperation regarding the supply of LNG carriers and LNG bunkering facilities by the President Director of PGN, M. Haryo Yunianto, and the President Director of PIS, Erry Widiasto. It was witnessed by the President Director of Pertamina (Persero), Nicke Widyawati on Friday, (25 /06). This collaboration is projected to increase the utilization of LNG volume up to 270 BBTUD.

This collaboration includes two things. First, the provision of an LNG carrier (LNG vessel) by PIS and its supporting facilities to meet project needs and PGN's LNG trading activities. Second, the provision of LNG and bunkering facilities by PGN for the conversion of PIS vessels that use fuel into LNG-based fuel. The pilot project is targeted at 5 (five) support vessels (newly built) owned by PIS.

This collaboration has implications not only for business, but also for the Pertamina group's commitment to implement Environmental, Social, and Governance (ESG) to reduce carbon emissions (decarbonization).

President Director of Pertamina (Persero), Nicke Widyawati, conveyed that internal collaboration become captive market and will bring positive impact to PGN and PIS and would continue to other sub holdings. It will strengthen the role of the two sub holdings in external market competition.

"Synergy is needed because, in the future, PGN will play an important role in the energy transition in Indonesia, especially in green energy, which requires significant resources and cannot be done alone. In support of PIS, PGN will supply LNG and LNG bunkering facilities in operating eco-green vessels is in line with the implementation of the global IMO 2020 standard," said Nicke.

Furthermore, added Nicke, the condition of Indonesia, which is an archipelagic country, does not prevent PGN from building pipelines throughout Indonesia, especially Central and Eastern Indonesia, with a virtual pipeline scheme.

"The virtual pipeline, which will be synergized with PIS' LNG vessel, is the same as the transmission gas pipeline, which will generate a captive market so that PGN can develop its gas distribution business in all islands in Indonesia," explained Nicke.

At the signing of the HoA, PGN's President Director, M. Haryo Yunianto, explained that the availability of an LNG carrier would support PGN's LNG trading activities in the domestic and Asian regions. Synergy with PIS is useful in the future LNG business planning roadmap.

"In addition to energy reliability and economic benefits, massive LNG trading is also an effort towards a cleaner and environmentally friendly energy transition," said Haryo.

The President Director of PIS, Erry Widiastono, said that as part of the Pertamina Group, PIS is monitoring PGN's future projects such as Kepmen-13, Teluk Lamong, FSRU in several locations, as well as PGN Trading. According to him, there is a need for transportation, storage, and regasification in the sea and rivers.

"And these needs can be met by PIS, which has business processes as Sub Holding Shipping and Integrated Marine Logistics Company," said Erry Widiastono.

Currently, PIS manages and operates more than 750 vessels consisting of owned and chartered vessels.

PGN and PIS had previously signed an HoA in June 2021 to develop RU IV Cilacap business using 1 (one) LNG Carrier unit that would run for 20 years. **