PT Perusahaan Gas Negara Tbk (hereinafter PGN, a natural gas supplier and subsidiary of Indonesian
national oil company PT PERTAMINA, hereinafter Pertamina), JGC Holdings Corporation (hereinafter JGC),
Osaka Gas Co. Ltd. (hereinafter Osaka Gas), and INPEX CORPORATION (hereinafter INPEX) have started
detailed discussions on commercialization of biomethane1
derived from palm oil mill effluent (POME) in Indonesia.
Pertamina, JGC, Osaka Gas and INPEX have been jointly studying use of POME-based biomethane for
some time. Recently, a decision was made regarding use of PGN natural gas pipelines, which, along with
the memorandum of understanding for feedstock procurement concluded with palm plantations and the
expressions of interest received from customers, has led the participants to begin in-depth discussions.
This phase will involve technical assessment of supply chain development, and biomethane production and
supply, assuming that biomethane production would begin in southern Sumatra in 2025.
Although Indonesia is the world's largest producer and exporter of palm oil?–?a key domestic industry
generating 4.5 percent of the GDP and employing nearly three million people?–?POME is rich in organic
material that is associated with significant emissions of methane, a gas estimated to have a greenhouse
effect 25 times greater than that of CO2.
The proposed project would recover methane gas currently released into the atmosphere from POME,
refine it into biomethane, and supply it to customers in Indonesia via natural gas pipelines and other
existing infrastructure. In addition to reducing methane gas emissions, other potential benefits include
meeting the country's rising natural gas demand and reducing consumer CO2 emissions by shifting from
fossil fuels to biomethane. In the future, the scale of these operations are expected to expand across
Sumatra and to Kalimantan as project participants also will consider supplying bio-LNG liquefied from
biomethane as a bunker fuel, exporting bio-LNG to Japan and elsewhere, and other potential business.
This project was also introduced at the Asia Zero Emission Community (AZEC) Ministerial Meeting in March
2023 as an initiative contributing to carbon neutrality in Asia.
PGN as Gas Subholding under Pertamina, plays a role during Indonesia’s energy transition phase toward
Net Zero Emission (NZE) by 2060. This project is expected to contribute to solving environmental
challenges along with the development of New and Renewable Energy (NRE) by using POME as an
environmentally friendly energy source. In this project, PGN will provide pipeline injection facilities and
natural gas pipelines that have good access to POME as a raw material. The biomethane produced from
the project is expected not only to meet industrial and consumer demand in Indonesia, but also to further
expand Pertamina's natural gas network.
JGC has accelerated its energy transition initiatives, working toward carbon reduction and
decarbonization in line with the May 2021 long-term management vision and the medium-term business
plan (2040 Vision and BSP 2025). To date, the Group has built an extensive track record in Indonesia in
plant construction for LNG and other purposes. JGC will contribute this experience along with project
management capabilities honed through many past projects to guide this collaboration.
Osaka Gas also stands united in developing technologies and services that support decarbonization and in
working to address climate change and other social issues, having announced their Carbon Neutral Vision
(CNV) in January 2021 and Energy Transition 2030 in March 2023. Working with local natural gas supplier
PGN and others in this project, the Group will apply biogas refining technologies supporting biomethane
production, experience in biomethane pipeline injection, and expertise from natural gas sales activities to
promote biomethane in Indonesia and reduce CO2 emissions in both Indonesia and Japan.
INPEX, in line with its Long-term Strategy and Medium-term Business Plan (INPEX Vision@2022)
announced in February 2022, proactively engages in energy structure reforms towards the realization of
a net-zero carbon society by 2050 while responding to energy demand in Japan and other countries
around the world. With the other participants, INPEX will promote efforts to establish business
responsive to climate change and provide clean energy supply in Indonesia.
