PT Pertamina (Persero) targets to supply around 71% of Indonesia's total energy needs in 2030 which is predicted to reach 7 million Terajoules (TJ). To that end, the company is moving towards a clean energy transition by increasing the supply of new and renewable energy to reach 17 percent of the total energy mix in 2030.
Pertamina's Director of Strategy, Portfolio and Business Development Iman Rachman said Pertamina was in the process of moving towards an energy transition. Pertamina's energy portfolio will be aligned with the energy mix target in the National Energy Grans Strategy (GSEN) 2025. Most of the energy supplied by Pertamina is still in the form of fossil fuels, but the growth of renewable energy supply will be more aggressive.
"With this strategy, by 2030, Pertamina will supply around 71 percent of Indonesia's total energy needs," he said.
Pertamina's energy mix target is to reduce the use of fuel oil and liquefied petroleum gas/LPG to 64%. At the same time, gas consumption will be increased to 19% and new and renewable energy to 17% of the total energy mix by 2030.
"In order to achieve the energy mix target, Pertamina will build an integrated oil and gas supply chain and actively build a new renewable energy portfolio by utilizing domestic resources," said Iman.
Pertamina has made the energy transition because the world is facing a significant demand disruption due to Covid-19, both in the short and long term. Global fossil energy demand is predicted to continue to grow and reach its peak in 2030. However, after that, the demand for fossil energy will decrease along with the rapid growth of new and renewable energy.
In Indonesia, energy demand is projected to recover after Covid-19 in 2022 and then grow by around 2.1% per year until 2040. Nationally, the energy mix will support emission reductions with a target of 29% in 2030 while still meeting national energy needs that reach 7 million Terra Joules.
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With this business initiative, Pertamina will allocate around 9% of the capital expenditure for the 2020-2024 period specifically for the development of new and renewable energy. This capital expenditure is higher than the investment in new and renewable energy of international energy companies which is only 4.3% on average.
A number of Pertamina projects include National Strategic Projects, both in the upstream, downstream, and renewable energy sectors. These projects have the potential to be collaborated to strengthen the foundation of the national economy.
"Other partnership opportunities can also be carried out in Pertamina's strategic projects and plans for unlocking values in order to optimize the value of Pertamina Group," said Iman.
Some of the activities that can be carried out with these partners include various efforts to increase Pertamina's oil and gas production, projects to repair and increase the capacity of a number of existing refineries, as well as the construction of green refineries, petrochemical plants with a capacity of 6-100 kilotonnes per annum / KTPA, and ethanol plants of 50 metric tons. per year by 2025.
Pertamina is also involved in Indonesia Battery Holding (IBH) to produce 140-gigawatt hour (GWh) batteries by 2029 and develop an electric vehicle battery ecosystem, including the battery exchange and recharges business. Other projects are the construction of new gas transmission and distribution pipelines and the construction of a methanol plant for gasification of 1,000 KTPA by 2025.
Other energy transition initiatives carried out by Pertamina are revitalizing business plans related to city gas for 30 million people's homes, developing businesses, and liquefied natural gas/LNG, as well as increasing the portfolio in the electricity sector through gas, geothermal and solar power plants.
Cooperate with Sonatrach
PT Pertamina (Persero) and Sonatrach, an oil and gas company owned by the Algerian Government, have signed a memorandum of understanding/MoU for upstream to downstream business cooperation, including renewable energy.
Pertamina President Director Nicke Widyawati said, in the midst of the Covid-19 pandemic crisis, national oil companies such as Sonatrach and Pertamina must remain strong in meeting national interests, especially in providing energy for the country. The signed MoU will cover the potential for collaboration in upstream and downstream businesses.
First, this cooperation covers exploration and production activities in Algeria and other countries. Next, evaluate the supply of Pertamina's Smooth Fluid (SF-05) as a drilling fluid in the upstream operation of Sonatrach. Then, evaluate the supply and shipment of crude oil and liquefied petroleum gas/LPG from Sonatrach to Pertamina. Lastly, the potential for other cooperation in the downstream business in Algeria, as well as oil and gas services.
"The MoU also includes potential cooperation in the field of renewable energy, particularly solar photovoltaic, as well as research and development activities," said Nicke Widyawati.
She hopes that the work teams from the two companies can follow up the agreement with discussions or workshops so that they can produce real progress and creative solutions in facing the challenges ahead. In addition, Nicke also hopes that Sonatrach can support Pertamina's operational expansion plans and programs in Algeria in the future.
"I firmly believe that this memorandum of understanding will be the doorway to achieving our goals, and strengthening the relationship between the two companies, and most importantly, the strong bond between Indonesia and Algeria," said Nicke.
Sonatrach President Director Hakkar Toufik said this signing was a good cooperative relationship. Because, in this agreement, there are new investment opportunities for both parties. So he hopes that this MoU can strengthen the two companies.
Investor Daily, Page-10, Wednesday, June 30, 2021.
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