Development of the PGN Consortium Biomethane Project with JGC, Osaka Gas and INPEX in South Sumatra

JAKARTA - PT Perusahaan Gas Negara Tbk (PGN) as Pertamina Gas Subholding, JGC Holdings Corporation (JGC) Osaka Gas Co., Ltd, INPEX COORPORATION has begun an in-depth study regarding the commercialization of biomethene originating from Palm Oil Mill Effluent (POME) in Indonesia. This phase will involve a technical assessment of the supply chain, production and supply of biomethane, with the assumption that biomethane production will start in Southern Sumatra in 2025.

The consortium will later use PGN's natural gas pipeline network to distribute biomethane made from POME, the raw material for which is from oil palm plantations in South Sumatra. Where several oil palm plantations have signed a Memorandum of Understanding in procuring POME raw materials.

"In this project, PGN will provide pipeline injection facilities and natural gas pipes that have good access to POME as the raw material. The biomethane produced from this project is expected not only to meet industrial gas needs and customer demand in Indonesia, but also as proof that Pertamina Group and its partners, in this case JGC, INPEX and Osaka Gas, are committed to continuing to encourage the development of renewable energy." explained PGN's Director of Strategy and Business Development Harry Budi Sidharta, Monday, September 25.

Indonesia is the world's largest producer and exporter of palm oil, contributing 4.5 percent of GDP and employing nearly 3 million people; Palm oil production leaves behind POME waste which is rich in organic material which produces large amounts of methane emissions. It is estimated that methane emissions have a greenhouse effect 25 times greater than CO2.

This production process will later capture methane gas released into the atmosphere from POME, to then be purified into biomethane gas and distributed through the natural gas pipeline network and other existing infrastructure to customers in Indonesia. In this way, the Biomethane project will provide benefits in the form of reducing methane gas emissions, reducing carbon emissions, and meeting Indonesia's natural gas needs.

In the future, the scale of operation of this project is expected to expand throughout Sumatra and Kalimantan, because the parties in this project are considering providing liquified bio-LNG from biomethane as bunker fuel, exporting bio-LNG to Japan and other countries, and business potential other.

This project was also introduced at the Asia Zero Emission Community (AZEC) Ministreal Meeting in March 2023 as an initiative that contributes to carbon neutrality in Asia.

JGC has accelerated its energy transition initiatives, pursuing emissions reduction and decarbonization in line with management's long-term May 2021 vision and medium-term business plans (Vision 2040 and BSP 2025). To date, JGC Group has built an extensive track record in Indonesia through the construction of LNG plants and other businesses. JGC will bring this experience to the project with experienced project management capabilities to lead this collaboration.

Osaka gas joins in developing technology and services to support decarbonization, efforts to address climate change and other social issues. Osaka Gas has also announced Carbon Neutral Vision (CNV) in January 2021 and Energy Transition 2030 in March 2023. In collaboration with PGN and other parties in this project, Osaka Group will apply biogas purification technology to support biomethane production.

In addition, Osaka Group has experience in biomethane pipe injection and has expertise in natural gas sales to promote biomethane in Indonesia and reduce CO2 emissions in both Indonesia and Japan.

In line with its long-term strategy and medium-term business plan (INPEX Vision 2022) in February 2022, INPEX is proactively involved in energy structure reform towards the realization of net zero emissions by 2050, while responding to energy demand in Japan and other countries around the world. Together with the parties involved in this project, INPEX will encourage efforts to develop businesses that are responsive to climate change and provide a clean supply of bunkering LNG in Indonesia.

Harry added that this project is in line with PGN's role in the energy transition in Indonesia towards the Net Zero Emission (NZE) target in 2060. Natural gas as a cleaner energy than other energy can reduce emissions by up to 40 percent and will be one of the energy solutions to achieve Indonesia's emission reduction target of up to 377 million tons of CO2 by 2035.

"This project will be able to contribute to overcoming environmental challenges along with the development of New and Renewable Energy (NRE) using POME as an environmentally friendly energy source," concluded Harry.