No 7. Perusahaan Gas Negara (PGN)
    Category: Best of the Best By : Gloria Haraito & Siti Aisyah Rachmawati Read : 2804 Date : Thursday, July 10, 2014 - 06:05:55

    Ahmad Zamroni for Forbes Indonesia

    PT Perusahaan Gas Negara (Persero) (PGN) continues to strengthen its position as the leading natural gas provider in Indonesia. Currently, the state-owned company is expanding its business both upstream and downstream, in a strategy it calls “beyond pipeline.” To meet its targets, this year PGN has allocated a capital expenditure of $1.25 billion, of which 70% comes from company’s internal cash, with $650 million to upstream investments, $400 million for floating storage and regasification units (FSRU) and $200 million for developing pipelines project.

    PGN President Director Hendi Prio Santoso, 47, says the expansion projects will help cut Indonesia’s dependence on oil. “Using more natural gas is one of the best ways to cut the budget deficit caused by the oil subsidies,” says Hendi. Since last year, PGN entered the upstream business after buying participating interest in five oil and gas blocks. Two of the blocks are operational, while the others are expected to start production this year. Hendi says the reason PGN went upstream is to secure its gas supplies.

    Meanwhile, in downstream, PGN through its subsidiary PT Gagas Energi Indonesia (GEI) will build more natural gas filling stations (SPBG) and mobile refueling units (MRU) to encourage the use of compressed natural gas-powered vehicles. Last December, GEI operated an SPBG and two MRU in greater Jakarta to serve public transport fleets such as buses, taxis and bajaj (all using compressed natural gas for fuel).

    Hendi is convinced that natural gas can be the next big energy source for Indonesia as its price is much lower than oil—a liter of gasoline costs Rp 6,000, while a liter of compressed natural gas (CNG) is only Rp 3,100. The biggest limiting factor is not the cost but the filling stations to make it convenient to operate CNG vehicles, believes Hendi. Therefore, this year PGN will develop 20 SPBG and three MRU in Jakarta, Bogor, Sukabumi and Surabaya.

    PGN is also continuing its FSRU project in Lampung with a capacity of 240 million metric standard cubic feet per day (MMScfd) for completion this year. Previously, PGN has operated FSRU West Java with a capacity of 400 MMScfd. Despite PGN’s ongoing expansion projects, Hendi is also extending its core business of natural gas transmission and distribution. In transmission, PGN provides big pipelines connecting oil and gas blocks to storage terminals, while its distribution business sells natural gas to end-consumers.