PGN and Pertamina NRE Explore Low Carbon Business Collaboration, Pertamina Subholding Collaboration Supports NZE

Jakarta, July 13, 2023 - PT PGN Tbk, as Pertamina’s Gas Subholding, and PT Pertamina Power Indonesia, as Pertamina’s Power & Renewable Energy (Pertamina NRE) Subholding, are exploring the potential for low carbon and renewable energy business development. It includes Green Hydrogen & Ammonia (Liquid Hydrogen) and Biomethane.

PGN and Pertamina NRE have signed a memorandum of understanding that will serve as the basis for communication, discussions, and studies for the cooperation implementation on Thursday (07/13/2023). The memorandum of understanding was signed by the President Director of PGN, Arief Setiawan Handoko, and the Chief Executive Officer of Pertamina NRE, represented by the Director of Strategic Planning and Business Development of Pertamina NRE, Fadli Rahman.

Arief Setiawan Handoko, President Director of PGN, stated that this low-carbon business collaboration will involve Low Carbon Hydrogen Business, Low Carbon Ammonia, Biomethane, Solar Power Plants (PLTS), Low Carbon Gas/LNG to Power Business, Renewable Energy Business, and Carbon Credit Trading development. In addition to being focused on future environmentally friendly businesses, this collaboration will strengthen Pertamina Group's Subholding role in achieving the Net Zero Emission (NZE) target.

"Both PGN and Pertamina NRE have agreed to conduct several feasibility studies covering technical and technological aspects, markets, economics, business, environment, law, risks, or other aspects for project implementation. To achieve the NZE target and during the energy transition, all elements of environmentally friendly energy must be involved, and PGN is also prepared to engage in this business. With its portfolio, PGN also sees this collaboration with Pertamina NRE as an opportunity to extend the business chain," said Arief.

"Pertamina NRE is always enthusiastic about positive collaborations like this because energy transition acceleration requires many parties’ cooperation. The synergy between Pertamina NRE sub holdings, as recently done between Pertamina and PGN, demonstrates Pertamina's commitment to supporting the net zero emission aspiration by 2060 through new and renewable energy development initiatives. Both PGN and Pertamina NRE have a high spirit to turn their commitment into tangible actions through this collaboration," stated Dannif.

PGN and PPI are also intensifying strategic, technical, and commercial cooperation for project development and utilization.

One of the projects to be developed is biomethane, which has positive prospects for the future. Biomethane has the potential to replace fossil fuels derived from oil and address environmental pollution caused by liquid waste from palm oil.

Biomethane is considered an energy source with abundant and sustainable raw materials, making it capable of being processed and utilized in the long term. It is estimated that PGN can manage up to 15 MMSCFD of biomethane, which can serve the needs of approximately 60 industries in the Industrial Zone.

"In our opinion, renewable energy sources such as biomethane, ammonia, and hydrogen are also appealing in the long term. Many parties are considering clean investments based on green energy. Investors will receive Carbon Credits for reducing greenhouse gas emissions. This is also part of the collaboration with PPI regarding carbon credits," said Arief.

Furthermore, Arief stated that PGN remains committed to achieving energy self-sufficiency within the country by strengthening the gas supply and expanding gas infrastructure, particularly during the energy transition towards NZE. The strategic plan continues to progress in creating added value and improving natural gas utilization.

"PGN's core business in natural gas utilization continues alongside efforts to diversify into renewable energy businesses. It is hoped that it can become a commodity that enhances the flexibility of conducting environmentally friendly energy businesses sustainably," concluded Arief.

Fadjar Djoko Santoso, Vice President of Corporate Communication of PT Pertamina (Persero), revealed that to accelerate low carbon businesses realization, Pertamina needs to strengthen synergy and collaboration across all business lines, enabling the Net Zero Emission 2060 target achievement.

"Low carbon businesses have a high potential in the energy transition era. Therefore, all subsidiaries' involvement according to their respective business scopes is necessary," 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.**