PGN Advocates Natural Gas as Transitional Energy & Three Pillars of Energy in Natural Gas Infrastructure Development in IKN

Balikpapan, June 13, 2023 – PT PGN Tbk, as Pertamina’s Gas Subholding, supports the government's strategic program in developing the National Capital of Indonesia (IKN) in East Kalimantan and providing clean energy in IKN. PGN implements the Three Pillars of Energy balance in natural gas utilization in IKN, where natural gas plays a role as transitional energy towards the Net Zero Emission target.

The Three Pillars of Energy include Energy Security (Secure & Reliable), Energy Equity (Affordable & Available), and Environmental Sustainability (Green & Clean). With the Energy Security principle, PGN manages domestic energy supplies that are distributed widely and effectively while maintaining energy infrastructure reliability to fulfill present and future needs.

Regarding Energy Equity, PGN aims to create easy access and affordability of natural gas supplies for the public. Then, in terms of Environmental Sustainability, PGN promotes clean and environmentally friendly natural gas energy utilization.

Achmad Muchtasyar, Director of Infrastructure and Technology of PGN, during the World Environment Day 2023 event with the Ministry of Environment and Forestry, revealed that natural gas infrastructure development by PGN in the IKN area would be carried out gradually in five stages, based on the population growth stages determined by Bappenas. The development is aimed at fulfilling commercial and household sectors' energy needs.

"In stages 1 and 2, gas infrastructure development in IKN will utilize the beyond pipeline mode, namely CNG or LNG, known as the bridging scenario, whereas in stages 3 to 5, pipeline distribution will be used, with the gas source originating from the Senipah-Balikpapan Pipeline as the main scenario," stated Achmad, (6/11/2023).

PGN has expanded its presence in East Kalimantan for natural gas utilization, thus enabling it to reach IKN in its development. In the East Kalimantan region, PGN manages integrated gas distribution, including the Senipah-Balikpapan Transmission Pipeline (under construction 2022-2023), Jargas in Samarinda, Jargas in Kutai Kartanegara Regency, Jargas in Bontang, Jargas in Balikpapan, Tanjung Santan-KM53-SKG Bontang Transmission Pipeline, Balikpapan SPBG, Bontang LNG Filling Station, and LNG Retail to Industries and Commercial sectors starting from 2023.

The potential demand for natural gas in IKN is approximately 12.6 BBTUD until stage 5 and can contribute to CO2 emissions reduction by 45,852 tons of CO² per year.

Achmad further stated that for gas supply in IKN, PGN will provide it from the East Kalimantan Gas Field conveyed through the PGN Senipah-Balikpapan pipeline. Additionally, the LNG Filling Station owned by PGN with a capacity of 12.8 BBTUD can be utilized, with the available gas allocation ranging from 4 to 7 BBTUD.

Meanwhile, the Balikpapan SPBG, operated by Pertamina Retail, has a capacity of 1 BBTUD, with available capacity ranging from 0.2 to 0.4 BBTUD. PGN also has allocate 5 BBTUD of LNG Kayan, with 2.5 BBTUD of available allocation.

The natural gas fulfillment in IKN by PGN follows the IKN Energy Policy based on Law Number 3 of 2022. IKN is planned to utilize a "mixture of hydrogen gas and natural gas" as the source of city gas in line with the vision of IKN with a net zero emission concept.

"PGN, as the implementing agency of Pertamina for gas development in IKN, is ready to collaborate with the IKN Authority and other stakeholders to develop natural gas in IKN specifically. PGN is also ready to serve and distribute natural gas for other sectors in the East Kalimantan region," said Achmad.

Natural gas is a cleaner and environmentally friendly transitional energy source. Natural gas utilization in IKN brings positive benefits and follows Indonesia's vision towards Net Zero Emission by 2060.

"Natural gas produces lower CO2 emissions compared to fossil fuels. Moreover, natural gas is domestically sourced, which helps save foreign exchange for energy imports. Finally, consumers would benefit from practical, reliable, comfortable, and safe energy products and services. Gas prices are also more competitive compared to other energy sources," emphasized Achmad.

Vice President of Corporate Communication of Pertamina, Fadjar Djoko Santoso, stated that Pertamina is committed to supporting NZE 2060 by implementing an energy transition roadmap, including natural gas development.

"Pertamina supports clean energy provision in IKN following the government's vision of creating an environmentally friendly capital city," said Fadjar.

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.**