PGN Secures Gas Supply from PJBG of Cepu and Muriah Blocks

Jakarta – PT Perusahaan Gas Negara Tbk (PGN), as Pertamina’s Gas Subholding, signed a Gas Sales Agreement (PJBG) with Pertamina EP Cepu for gas supply from the Cepu Block and an amendment to the PJBG with Saka Energi Muriah Ltd for gas supply from the Muriah Block. The signing ceremony took place at the IOG Supply Chain & National Capacity Summit 2024 (IOG SCM Summit) at the Jakarta Convention Center on Wednesday, August 14, 2024. PGN was represented by its Director of Strategy and Business Development, Rosa Permata Sari, and witnessed by Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif, Head of SKK Migas Dwi Soetjipto, and PGN President Director Arief Setiawan Handoko.

The oil and gas (O&G) industry is critical to the economy, requiring the exploitation of available resources to maximize developmental growth. The government, SKK Migas, and business entities, alongside other stakeholders, play key roles in optimizing the supply chain.

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan noted that a significant gas potential, approximately 20 TCF, was discovered in IDD, South Sulawesi, along with other reserves in Masela and Andaman. "The key lies in how we manage it collaboratively and ensure we have capable personnel to oversee these efforts," he said during his keynote speech at the opening ceremony of the IOG SCM Summit on Wednesday, August 14, 2024.

Luhut highlighted three strategic keys to ensuring Indonesia’s energy security balance, one of which is optimizing domestic supply utilization.

In the same event, Minister of ESDM Arifin Tasrif stated that developing the domestic oil and gas industry strengthens the supply chain, reduces dependence on imports, and accelerates the provision of goods and services. Furthermore, developing existing supplies will also contribute to national economic growth.

SKK Migas Head Dwi Soetjipto expressed hope that discussions at the IOG SCM Summit would strengthen the upstream oil and gas industry while ensuring the supply remains robust and adaptable to global market demands.

These concerns from the government and regulators align with PGN's priorities. With the PJBG from the Cepu Block, PGN will continue managing the Lamongan household gas network (jargas), which previously sourced gas from Madura Offshore, now supplied from Jambaran Tiung Biru (JTB). The gas volume to be distributed is 0.2 MMSCFD until 2029 or the end of JTB's natural gas production.

Through the amendment to the PJBG from the Muriah Block, PGN has also secured an agreement to increase the contracted volume by 5,000 BBTU from the Kepodang Field in the Muriah Working Area (WK). As a result, the total contract volume now stands at 19,000 BBTU. The allocation and utilization of natural gas from the Kepodang Field will be distributed by PGN to meet the needs of the domestic electricity and industrial sectors.

PGN President Director Arief Setiawan Handoko stated, "The utilization of domestic natural gas for national interests is our primary concern. Through cooperation between PGN, the government, and gas-consuming sectors, we are collectively optimizing domestic energy. One key to gas absorption lies in the availability of infrastructure. The integration of infrastructure in Central Java has proven to enhance natural gas utilization in the surrounding areas. This signing strengthens supply amid rising demand, creating a multiplier effect to boost regional and national economies."

PGN’s Director of Strategy and Business Development, Rosa Permata Sari, added, "PGN is enthusiastic about increasing the number of customers. The additional volume obtained will support PGN’s efforts to expand gas services and accessibility, especially in Central and East Java."

Currently, PGN serves 160,000 customers in Central and East Java, encompassing households, small businesses, commercial entities, industries, and the power sector. It is hoped that the number of natural gas users will continue to grow.

"Through the signing of these two PJBGs, PGN aims to expand its market reach. Utilizing domestic gas supplies from Cepu and Muriah is intended for domestic gas users in the household, industrial, and power sectors. It is expected that the value-added benefits of natural gas will be optimized by each sector," Rosa concluded.

Kembali Ke Beranda