PT Perusahaan Gas Negara (PGN), the Indonesian state-owned gas company, will develop three domestic LNG hubs to supply the country’s power stations, it has announced. 

It will spend $2.5 billion on: developing its LNG terminal in Arun, Aceh into a regional gas distribution hub; developing a floating storage and regasification unit (FSRU) in Lampung, Sumatra; and building a new terminal in Ambon, Maluku, that will serve western, central and eastern Indonesia. The development plan includes pipelines, ships, trucks and supporting facilities.

The three new hubs will supply gas to 52 power stations. At the moment, its power stations are running on diesel, which is more readily available, but these new hubs will allow them to switch to cleaner-burning gas more easily. 

This is apt as the Indonesian Government wants to cut oil imports as part of efforts to cut greenhouse gas emissions. 

PGN is working with PT Perusahaan Listrik Negara (PLN), the state-run energy firm, to convert all 52 plants to run on gas. Environmental impact aside, switching to gas is expected to save fuel costs of up to $277 million.

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21st July 2020