Public Expose 2023: PGN Highlights Performance and Strategic Efforts in National Natural Gas Management
Jakarta, November 29, 2023 – Participating in the Public Expose Festival 2023 organized by the Indonesia Stock Exchange ("BEI"), PT Perusahaan Gas Negara Tbk ("PGN"), as Pertamina's Gas Subholding, presented the company's achievements and recent developments until the third quarter of 2023. The event was held online through various channels and attended by investors, media, and the public.
Towards the end of 2023, the strategic policy pursued is consistently adding new customer portfolios to achieve the natural gas management target volume. Efforts in business diversification are driven through the role of subsidiaries, allowing consolidated revenue growth through other business ventures. Furthermore, optimal cost management is carried out without reducing the business activities' security and reliability. PGN also ensures a reliable work team through competency development and HSSE implementation for work comfort.
"PGN is executing Customer Acquisition to increase natural gas volume management through new customer additions, providing beyond pipeline gas infrastructure (LNG & CNG retail), and expanding household gas pipelines to support subsidy reduction policies. Meanwhile, business diversification is developed by subsidiaries through the LNG Arun, biomethane projects, and Pangkah WK optimization development," explained President Director of PGN, Arief Setiawan Handoko.
Regarding operational achievements, natural gas flow in the transmission business increased by 8%, reaching 1,444 MMSCFD. It is due to the gas flow in the Gresik-Semarang Transmission Pipeline. The natural gas trade volume also grew by 5%, reaching 935 BBTUD, with over 839 thousand customers, primarily from power generation, chemical, ceramic, food, and fertilizer industries. One reason for the increase in trade volume is the competitive average gas price sold by PGN compared to other fuels such as HSD (equivalent to USD 41.18/MMBTU), LPG - 12 kg (equivalent to USD 26.20/MMBTU), or MFO (equivalent to USD 33.74/MMBTU).
Among the subsidiary-led business portfolios achieving performance growth, oil transportation reached 42.9 MMBOE, a 400% increase due to oil distribution through the Rokan pipeline. Additionally, LNG regasification saw a 21% increase to 158 BBTUD due to rising demand at the Arun LNG Hub.
With these operational achievements, PGN's consolidated revenue increased by 2%, recorded at USD 2.69 billion. The largest contribution was obtained from the natural gas trade and transmission business, accounting for 78%, with the remaining from upstream and other businesses.
The cash position, equivalent to cash, remains solid for the company's investment and working capital needs, with a recorded value of USD 1.04 billion. This figure decreased from the same period in the previous year as part of the company's effort to improve its debt structure through a corporate bond buyback.
"Our cash position is still good after this year's buyback and is driven by maintained operating cash flow. Moreover, considering the interest coverage ratio (10.3x) and the debt-to-equity ratio (0.5x), PGN still maintains a healthy liquidity condition. If external financing is needed, that opportunity is still open," said Fadjar Harianto Widodo, the Management Director of Finance and Risk.
Furthermore, USD 132 million capital expenditure has been realized, with 57% used for downstream and other businesses and the remainder for upstream business needs. Some projects absorbing this capital expenditure include the Pertamina oil refinery gasification through the Senipah-Balikpapan Gas Pipeline, the city gas network ("jargas"), and the revitalization of the Arun LNG terminal.
The Senipah-Balikpapan Pipeline has been installed approximately 76 km from the 78 km target. This project is a synergy contribution of PGN to Pertamina in supporting the operations of Refinery Unit V Balikpapan. The pipeline, with a diameter of 20 inches, began construction in 2022.
In supporting the government's national strategic project execution, PGN-funded city gas development has been implemented in 37 cities/districts with various transportation modes. The completed construction has connected 102,354 households.
Efforts to revitalize the Arun LNG Terminal assets are in line with efforts to capture the Asian LNG market's attractive potential. In the future, unoptimized tanks will be modified to operate with a design capacity of 127,000 m3. Currently, the project is in the process of finding a working partner for the EPC work.
PGN will continue to contribute and capitalize on opportunities to achieve the Net Zero Emission target through biomethane development. This project aims to sustain PGN's natural gas business by utilizing palm oil waste. The potential demand so far can reach approximately 5.2 MMSCFD. Currently, the project is in the Front End Engineering Design ("FEED") preparation stage.
Vice President of Corporate Communication of Pertamina, Fadjar Djoko Santoso, stated that Pertamina continues to strengthen its commitment to becoming a world-class company while upholding corporate values and shareholder interests. Pertamina will also continue to develop natural gas as a transitional bridge to renewable energy.
"The positive performance of all of Pertamina's Subholdings will support Pertamina's target as a Global Energy Champion. At the same time, Pertamina will continue to reduce carbon emissions to achieve the NZE 2060 target," 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.**