SECURE SUPPLY OF RAW MATERIALS, PUPUK INDONESIA GROUP SIGNED GAS SALE AND PURCHASE CONTRACT

BALI – In order to support the sustainability of gas supplies for fertilizer production, PT Pupuk Indonesia (Persero) through its subsidiaries signed gas sale and purchase agreements (PJBG) with several oil and gas companies. The signing of the PJBG was carried out at the International Convention Indonesia Upstream Oil & Gas 2023 (IOG) in Bali, Wednesday (20/9/2023).

The President Director of Pupuk Indonesia, Rahmad Pribadi stated that the commitment to fulfill gas supplies for the fertilizer industry is a joint commitment in supporting the Government's priority programs such as national food security to the National Strategic Project (PSN).

“We welcome the government's full support for the supply of gas for Pupuk Indonesia Group. "The signing of the gas sales and purchase agreement carried out by Pupuk Indonesia's subsidiary will certainly have a positive impact on the national fertilizer industry," said Rahmad.

Rahmad further stated that the signing of the PJBG was also to support the sustainability and increase in fertilizer production capacity in the future. Moreover, one of PJB's commitments is to supply the gas needs of the fertilizer industrial area in Fakfak, West Papua, which also has the status of a National Strategic Project.

According to Rahmad, the PJBG commitment that has been jointly signed also supports the downstream program which is President Jokowi's focus. Pupuk Indonesia is determined to become a player in the national petrochemical industry. The reason is, Pupuk Indonesia Group will diversify the industry by developing ammonia, soda ash, methanol, and so on.

"Therefore, downstreaming this industry will reduce imports of a number of chemical products, open up jobs, improve the investment climate, so that it will have an impact on national economic growth," he added.

Rahmad also appreciated the Government's support, in this case the Ministry of Energy and Mineral Resources (ESDM) and SKK Migas for supporting the gas sale and purchase agreement process. This is a concrete form of the government's commitment to Ministerial Decree (Kepmen) of Energy and Mineral Resources Number 91 of 2023 concerning Certain Natural Gas Users and Certain Natural Gas Prices in the Industrial Sector.

The signing was carried out by the President Director of PT Pusri Palembang (PSP) Tri Wahyudi Saleh, the President Director of PT Pupuk Kaltim (PKT) Budi Wahju Soesilo, and the Director of Portfolio & Business Development of PT Petrokimia Gresik (PG) Digna Jatiningsih with several Cooperation Contract Contractors (KKKS) such as PT Medco E&P Indonesia, PT Medco E&P Lematang, PT Pertamina EP Cepu, Genting Oil Kasuri Pte. Ltd, and Husky CNOOC Madura Ltd. Also witnessing the signing were the Minister of Investment/Head of BKPM Bahlil Lahadalia, Head of SKK Migas Dwi Soetjipto, Director of Portfolio & Business Development of Pupuk Indonesia, Jamsaton Nababan.

Investment Minister Bahlil Lahadalia supports the process of signing gas sale and purchase agreements carried out by KKKS for several national strategic sectors. Bahlil said this activity supports the downstream program which is currently being intensified by the Government.

“Indonesia is now encouraging downstreaming in the oil and gas sector. We have calculated this downstreaming, to become a Golden Indonesia, making Indonesia with the 6th largest GDP in 2045, the concept of future downstreaming is USD 548 billion with 8 priority sectors with 21 commodities. "For example, in Papua for fertilizer, for blue ammonia, one in Fakfak and one in Bintuni," said Bahlil.

Meanwhile, the Head of SKK Migas, Dwi Soetjipto, said that the commitment to fulfill gas supplies is important in supporting the national downstream program. According to Dwi, the Government will provide incentives to increase gas production, especially in oil and gas fields.

The Pupuk Indonesia subsidiary that signed the gas sale and purchase was PT Pupuk Kaltim with Genting Oil Kasuri Pte. Ltd with a volume of 102 MMSCFD. The new gas flow will begin in the fourth quarter of 2027. This agreement aims to ensure the success of the urea ammonia factory project in the Fakfak fertilizer industrial area, West Papua. Furthermore, PT Pupuk Sriwidjaja Palembang is collaborating on gas buying and selling with Medco E&P Indonesia and Medco E&P Lematang with a daily volume of around 5 BBTUD to 18 BBTUD which will start in 2023. PT Petrokimia Gresik is collaborating to buy and sell gas with two companies at once, namely Pertamina EP Cepu with a gas volume of 15 MMSCFD. Next with Husky CNOOC Madura Ltd, as a form of securing long-term gas supplies if existing gas wells have experienced declination.