Pertamina, PGN sign agreement to develop Duri-Dumai gas pipeline

By Godang Sitompul

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State-owned oil and gas firm PT Pertamina signed on Friday an agreement with state-controlled gas distribution firm PT PGN Tbk for cooperation in the development and operation of the Duri-Dumai gas pipeline project in Riau Province.

The agreement was signed by Director of Gas and Renewables at Pertamina, Yenni Andayani, and President Director of PGN, Jobi Triananda.

Pertamina will hold a 60 percent interest in the project, while the remaining 40 percent to be held by IDX-listed PGN. Pertamina and PGN will jointly develop and operate a planned 67-km gas pipeline linking Dumai and Duri, which will be used to transmit Pertamina?s gas to its Dumai refinery and distribute PGN?s gas to its customers.

The two firms will form a joint management committee, which will then set up a joint venture company to develop the project, which is targeted to be completed in 18 months.

The signing of the agreement comes following a 2016 decree issued by Minister of Energy and Mineral Resources Ignasius Jonan for the two companies to cooperate in the development of the Duri-Dumai gas pipeline project.

Yenni said that this is not the first time for the two firms to run a joint project, citing as an example on PT Nusantara Regas, a joint venture company between Pertamina and PGN, which operates the West Java floating storage and regasification unit (FSRU), supplying gas to power plants owned by state-owned power firm PT PLN.

Jobi said that the administration of President Joko Widodo has set up target to develop various gas infrastructure facilities across the country worth a combined investment of US$32 billion. The latest synergy between Pertamina and PGN forms part of efforts to help realize the target, he said.

Editing by Reiner Simanjuntak