Joint study agreement will explore bio-LNG development in Indonesia

Pertamina, Osaka Gas, JGC Holdings and INPEX have entered into a joint study agreement on exploring the feasibility of a clean natural gas and LNG project in Indonesia involving the production of biomethane from palm oil mill effluent (POME). The project is expected to support the Asia Energy Transition Initiative (AETI), a plan unveiled by the Government of Japan in 2021 that aims to help achieve sustainable economic growth and carbon neutrality in Asia through energy transitions.

Indonesia is the world’s largest producer and exporter of palm oil, and it is a key industry that supports the employment of approximately three million persons and generates 4.5% of the country’s GDP. POME is known to contain large quantities of organic material resulting in significant methane emissions, which is generally said to have 25 times larger impact on global warming compared to CO2. The project is intended to contain POME-derived greenhouse gas (GHG) emissions by sequestering methane and converting it to biofuels, contributing to the supply of clean energy in a sustainable manner.

Through this initiative, the parties will jointly conduct a study on the feasibility of the project, including cooperation on the research and development of technologies and solutions pertaining to the production of biomethane from POME resources located in Sumatra and Kalimantan and supplying to consumers in Indonesia. The aim of the project is to supply biomethane through the existing gas grid, meet growing natural gas demand and contribute to the reduction of Scope 13 emissions of gas consumers in Indonesia.

In addition, the parties will jointly assess opportunities for the project to leverage carbon crediting mechanisms and bio-methane certification schemes to secure carbon neutrality. Finally, the joint study will also involve identifying biomethane/bio-LNG and bunker fuel marketing opportunities, including bio-LNG export to Japan and/or other countries.

Pertamina positions this collaboration as a continuation of several green energy development projects it has developed so far as part of a more comprehensive effort to reduce GHG emissions by 30% before 2030. In addition to developing New and Renewable Energy (NRE), this collaborative project helps overcome environmental challenges especially by turning palm oil waste into environmentally friendly energy.

In this project, Pertamina will provide several facilities and locations with good accessibility to raw material sources in Kalimantan and Sumatra. In addition, the output from the initiative is expected to help meet the natural gas demands of the industrial sector and general consumers, and expand the development of Pertamina’s natural gas network.

This study is in line with the Daigas Group Carbon Neutral Vision (CNV) announced in January 2021. Aiming to become carbon neutral by 2050 under CNV, Osaka Gas will continue to develop technologies and services that contribute to a decarbonized society and solve social issues such as climate change. To expand the use of biomethane in Indonesia and to reduce CO2 emissions in both Indonesia and Japan, Daigas Group will contribute to this collaboration through the technology of bio-methane production from bio-gas, the experience of biomethane pipeline injection, and the knowledge of natural gas marketing.

As outlined in its Long-term Strategy and Medium-term Business Plan (INPEX Vision @2022) announced in February 2022, INPEX seeks to proactively engage in energy structure reforms towards the realization of a net zero carbon society by 2050 while responding to the energy demands of Japan and other countries around the world. In line with this strategy, the company aims to work closely with its partners to build a business framework contributing to climate change response and explore opportunities to provide clean LNG bunkering solutions at the Bontang LNG Terminal in Indonesia.

JGC group recognizes this program as an important strategy to unlock the clean transition fuel interests in the Asian region to achieve its medium-term management plan, “Building a Sustainable Planetary Infrastructure 2025.” JGC will contribute to this collaboration by delivering its core competencies in program management as well as its world-class engineering capabilities acquired through its rich track records in building gas processing facilities in Indonesia.

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