Danantara plans to refocus PGN on gas distribution business

By Bernard Loebs

Danantara Indonesia plans to overhaul the business model of PT Perusahaan Gas Negara Tbk (PGN) (IDX: PGAS) by narrowing its focus to midstream and downstream gas activities, according to Dony Oskario, Chief Operating Officer of Danantara and head of the State-Owned Enterprises Management Agency (BP BUMN).

Speaking on a YouTube program on Wednesday, Dony said PGN would no longer be positioned as an integrated gas company spanning upstream exploration through downstream distribution.

"PGN will focus on the midstream and downstream sectors. Its main role will be distributing gas to households so people no longer rely on LPG cylinders," he said.

Dony said the move forms part of a broader effort by BP BUMN to streamline the portfolio of Indonesia's 1,073 state-owned enterprises, improve corporate governance and increase operational efficiency.

The planned changes are also linked to the government's energy security agenda, which includes developing renewable energy projects, advancing coal-to-dimethyl ether (DME) projects as a substitute for imported LPG, and reducing Indonesia's dependence on energy imports.

PGN, Pertamina's gas subholding, currently operates across parts of the upstream oil and gas sector through Saka Energi Indonesia while managing thousands of kilometers of gas transmission and distribution pipelines throughout Indonesia.

Editing by Alexander Ginting