Pertagas signs HoA with PTPN III on gas supply

PT Pertagas Niaga, a subsidiary of state-owned oil and gas firm PT Pertamina, signed on Friday a Head of Agreement (HoA) with state-owned plantation firm PTPN III on gas supply to the Sei Mangkei special economic zone in Simalungun, North Sumatra.

Under the deal, Pertagas will supply 75 mmscfd of gas from the Arun floating storage regasification unit (FSRU) in Aceh to Sei Mengkei, which is operated by PTPN III, Pertagas said in a statement. Of the total supply, 40 mmscfd will be allocated for industries located in the Sei Mengkei industrial area such as Unilever Oleochemical, Procter and Gamble, and Samator Group.

Meanwhile, another 35 mmscfd will be supplied to an independent power plant (IPP), operated by a consortium, in which Pertamina is a member. The Sei Mangkei special economic zone will require up to 238 MW of electricity supply over the next 25 years. For now, the special economic zone only have a 7MW biomass-based power plant in operaton.

Pertamina?s move to diversify into electricity production is part of its strategy to become a world class national energy company, the statement said.

Editing by Reiner Simanjuntak