Minister of Energy and Mineral Resources Inaugurates the Dual Fuel Prototype Vessel Owned by Pertamina Hulu Mahakam

Balikpapan, August 13, 2024 - The Minister of Energy and Mineral Resources (ESDM), Arifin Tasrif, and the Minister of Transportation, Budi Karya Sumadi, inaugurated the Diesel Dual Fuel (DDF) Crewboat Prototype operations owned by PT Pertamina Hulu Mahakam (PHM). The inauguration occurred at the Somber Port in Balikpapan, East Kalimantan, on Monday, August 12, 2024.

Attending the inauguration was the Minister of Energy and Mineral Resources, Arifin Tasrif and Minister of Transportation, Budi Karya Sumadi, accompanied by the Head of SKK Migas, Dwi Soetjipto, Director of Development and Production of Pertamina Hulu Energi, Awang Lazuardi, President Director of Pertamina Hulu Indonesia, Sunaryanto, and General Manager of PHM, Setyo Sapto Edi.

Arifin praised PHM's initiative in supporting the government's program to reduce emissions following the Net Zero Emission (NZE) target by 2060 or earlier. "The inauguration of this DDF Crewboat prototype is a concrete example of the active participation of Indonesia's oil and gas companies, which can significantly benefit PHM and the general public," he said.

Arifin explained that the world is moving towards green energy, including in the transportation sector, where the International Maritime Organization (IMO) has already formulated environmentally friendly fuels with low or zero emissions use.

"The initiative for this hybrid crew boat with a diesel dual fuel system is commendable. Of course, it is based on thorough studies and careful calculations, allowing effective implementation to reduce emissions and improve fuel efficiency," Arifin elaborated.

Arifin hopes that the DDF vessel modification initiative can soon be applied to other ships, as it has impressive efficiency.

"This DDF vessel will be tested for a year. Then, we can expand it to other ships. From this trial, we will examine the factors that can motivate shipowners. If it proves to have good economic and investment value, they can invest in further modifications," Arifin explained.

Arifin also noted that using DDF vessels will maximize domestic gas production and reduce reliance on increasingly expensive crude oil. "Given the current geopolitical landscape, crude oil prices are controllable and will likely never drop below USD 70 per barrel again. If prices drop by 5, production is reduced by 9. We observe this now. Like a yo-yo, we must challenge ourselves to utilize domestic energy sources," he concluded.

At the same event, the Minister of Transportation, Budi Karya Sumadi, also appreciated PHM's efforts with the DDF vessel, recognizing it as one of Indonesia's tangible steps to follow the IMO's recommendations for adapting to climate change by reducing emissions from maritime transport.

"By making various efforts, including green shipping, it aligns with what the IMO has initiated, and we must support it while mitigating the obligation to use low-sulfur fuel," he added.

The Head of SKK Migas, Dwi Soetjipto, expressed his appreciation for PHM's success in converting the diesel dual fuel crewboat to incorporate the LNG (Liquefied Natural Gas) use in this era of energy transition. This step follows Indonesia Oil & Gas (IOG) 4.0's strategic plan, which emphasizes environmental sustainability and is one of the Low Carbon Initiative (LCI) programs.

"In addition to positively impacting the environment, the use of LNG will also provide cost savings for PHM, and if followed by other contractors, it will improve the operational efficiency of the upstream oil and gas industry while promoting the use of gas as a substitute for oil domestically," Dwi added.

Meanwhile, PHM’s General Manager, Setyo Sapto Edi, stated that the DDF vessel technology is part of PHM's transportation efficiency efforts. Using a diesel-based vessel would consume 1,500 liters of fuel per day, but with DDF, only about 40% of the fuel will be diesel, and the remaining 60% will come from LNG (Liquefied Natural Gas).

"The efficiency we gain from this crew boat is significant. Estimating the daily fuel consumption at 1,500 liters, after modifying it to a DDF vessel, we will replace 60% of the fuel with 30 MMBTU LNG, resulting in savings of around IDR 12 million per day," Setyo explained.

For information, the DDF Crewboat is a vessel with a diesel engine modified to run on a mixture of diesel and LNG. This technology does not eliminate diesel use but reduces its consumption. The LNG tank is placed in the fuel tank compartment.

Based on PHM studies, the DDF utilization could optimize diesel fuel consumption by approximately 6,050 kiloliters per year for ten crew boats operating offshore in the Mahakam block and potentially reduce operational costs by USD 4.1 million annually.

Vice President of Corporate Communication of PT Pertamina (Persero), Fadjar Djoko Santoso, added that as the parent company of Pertamina Group, they appreciate PHM's innovation with the DDF vessel, as it will contribute to emission reduction, support the achievement of NZE, and operationally improve fuel efficiency. The LNG use as an alternative fuel will also enhance the utilization of transitional energy.

"The trial operation of the DDF vessel, which combines the use of diesel and LNG, is a significant step forward and aligns with Pertamina's target of leading the energy transition, as LNG is more efficient and environmentally friendly," Fadjar concluded.

PT Pertamina Hulu Mahakam (PHM) is an affiliate of PT Pertamina Hulu Energi (PHE), the Subholding Upstream of Pertamina. PHE continues to invest in managing upstream oil and gas operations and business following the principles of Environmental, Social, and Governance (ESG). PHE is committed to the Ten Universal Principles of the UNGC in its strategy and operations as part of its ESG implementation.

Supporting the aspect of Governance, PHE remains committed to Zero Tolerance on Bribery by ensuring fraud prevention and maintaining a bribery-free company, including implementing an ISO 37001:2016 certified Anti-Bribery Management System (SMAP).

PHE continues to develop prudent and excellent operational management domestically and internationally to become a world-class oil and gas company that is environmentally friendly, socially responsible, and well-governed.

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.**