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PGN and Pertagas integration controls 96% of downstream gas business

09 November 2018 05:53 AM  Company: []
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JAKARTA. The integration of PT Perusahaan Gas Negara Tbk (PGN) with PT Pertagas in the SOE oil and gas holding has consolidated the ownership of the downstream gas business portfolio by the SOEs to 96%. That way, infrastructure utilities increase and operations are more efficient.

PGN President Director Gigih Prakoso said the establishment of oil and gas holding could increase infrastructure utilities and strengthen the oil and gas supply chain, in order to improve natural gas services throughout Indonesia.

"PGN and Pertagas infrastructure are united, such as the transmission or distribution pipeline, it can further increase utility and efficiency for both operations," Mr Prakoso said in a sharing session with workers in Batam, Riau Islands, as quoted by Antara, Thursday (8/11).

The establishment of the Oil and Gas Holding, where PT Pertamina (Persero) acts as the parent company of the oil and gas sector, including PGN, is a strategy to strengthen the national energy sector. Mr Prakoso believes with Pertamina's parent company, the state-owned business entity in the energy sector can be harmonious.

Integration of PGN and Pertagas infrastructure will strengthen the downstream gas portfolio. Directly, the gas subholding controls more than 96% of the downstream gas portfolio.

It has also succeeded in achieving the targets of the National Energy General Plan (RUEN) until 2025, including 4.7 million new household connections, 6,302 kilometers of downstream pipelines, and 5,437 kilometers of upstream pipes.

"With this power, natural gas services for all segments can be enjoyed by people from Aceh to Papua. In the end, the vision of the future is to make PGN a global scale gas business player, by first strengthening the domestic gas business," Mr Prakoso said.

The establishment of a gas holding is also an effort to solve the problem of building national energy sovereignty.

Mr Prakoso stated natural gas is a potential energy source that has bright prospects. Moreover, Indonesia still has a lot of natural gas content that has not been fully explored. However, natural gas utilization is not optimal because supply chain management is still weak.

Moreover, for state-owned business entities, there are several state-owned corporations that play in the same sector. This makes the management and service of state-owned entities not optimal. In addition, similar businesses within SOEs cause uneven distribution of infrastructure and prices. Especially for industrial segments that still need buffer from the fuel supply side.

On the other hand, gas infrastructure which is also fragmented creates conditions that are not ideal for strengthening the national energy sector. (AM/MS)