PIS Strengthens LPG Business By Collaborating With Global Scale Partners

PT Pertamina International Shipping (PIS) is strengthening the liquid petroleum gas (LPG) transportation business by cooperating with leading global-scale shipping company partners, B International Shipping and Logistic DMMC (B Shipping).

PIS CEO Yoki Firnandi in his statement in Jakarta, Wednesday, June 19, said the cooperation was in line with the direction of the Ministry of SOEs to unlock value or increase the value of PIS assets.

"We encourage synergies with strategic partners to rejuvenate and strengthen our fleet for energy distribution throughout the country," he said, as reported by Antara.

PIS has signed a cooperation agreement with B Shipping for the purchase and/or charter of LPG ships in Istanbul, Turkey. The signing was carried out by PIS CEO Yoki Firnandi and B Shipping CEO Emin Imanov.

The two-year cooperation includes a feasibility study for the purchase of ships and ship charter management to BGN, parent company B Shipping, which is also a global LPG trading company and commodity.

PIS and BGN have previously collaborated in the procurement of the giant gas vessel (VLGC) Tulip and Bergenia in January 2024.

Through this collaboration, BGN has supported PIS as the largest LPG carrier in Southeast Asia.

Currently, cooperation with B Shipping is being carried out to explore further opportunities and increase the value of PIS in LPG transportation.

One of the discussions includes business concepts and models, including considering the acquisition and charter of ships, as well as ship management.

Yoki added that the cooperation is in line with PIS's strategic investment approach in new ships while maximizing the benefits of existing assets.

Currently, there are 419 VLGCs operating worldwide, with an average ship lifespan of 10.08 years.

"Meanwhile, PIS has seven VLGCs with an average age of 3.42 years, thus providing a more reliable operational advantage and meeting the latest regulations. We are also implementing a prudent fleet allocation strategy by looking at the situation and prices in the market, whether it is owned, leated, or time charter-out and maintaining the investment practice for sustainable growth," said Yoki.

B Shipping is a subsidiary of Dubai-based BGN with attendance in more than 24 locations in various countries.

Through marine services, logistics, shipping technical, and smart solution, B Shipping manages BGN's maritime assets and other partners to support BGN's energy trade and global physical commodities.

BGN has been operating in 23 locations for 80 years including Casablanca, Doha, Dubai, Geneva, Rotterdam, Jakarta, and Singapore.

CEO B Shipping Emin Imanov also emphasized the importance of strategic partnerships with PIS.

"This journey started four or five years ago when we decided to support Pertamina International Shipping in terms of international trade, and we continue to strengthen our relationship last year. Currently, we have become partners in shipping, and I believe there will be many more in the future. I believe that the only thing that can help us achieve our common goal is friendship and mutual trust, so I believe there will be much more cooperation in the future," he said.

The collaboration also explores the potential partnership in the energy transition era, including LPG transportation and petrochemicals.

Data from the Ministry of Energy and Mineral Resources shows that LPG consumption in Indonesia reaches 8.7 million tons in 2023, up 1.73 percent compared to 2022 or the highest in the last decade.

On the other hand, PIS' internal analysis shows the potential for petrochemical cargo growth in Indonesia to reach 1.3x CAGR from 2019 to 2030.

Yoki is also optimistic that cooperation with B Shipping will strengthen PIS's position in the global market.

"The signing of this agreement is an important momentum for both companies to face challenges and opportunities in the future," he said.