In its business process, the company receives LNG from the refinery to be redistributed to customers. The company gets supplies from the Bontang Refinery, East Kalimantan, owned by PSC Mahakam and Tangguh, Papua, owned by BP Berau Ltd, and the Donggi Senoro Refinery. The total supply received from this in 2018 reached 93,697,216 MMBTU consisting of 23.1 standard cargo from Bontang, 8.6 standard cargo from Tangguh, and 0.8 standard load from Donggi Senoro. LNG Aquarius was chartered by NR from PT Hanochem Shipping starting in 2012. The Aquarius ship is an Indonesian-flagged LNG ship carried out by a 100% crew from Indonesia. This LNG Carrier transports LNG to the FSRU NR Satu. LNG Carrier “Aquarius” has a carrying capacity of 125,000 m3. The use of LNG Aquarius complies with the cabotage principle in which domestic transportation vessels in Indonesia must have an Indonesian flag. The FSRU of NR is located in Jakarta Bay under the name NR Satu with a regasification capacity of 500 MMSCFD and can accept LNG vessels ranging in size from 125,000 m3 to 175,000 m3. In its operation, NR cooperates with Golar LNG Energy Limited. FSRU NR Satu is a modification of the Khannur LNG carrier. The facility is owned and operated by Golar LNG Energy Limited.
The regasification process starts with LNG, which is transferred from the LNG carrier to the FSRU, then flows to the regasification unit to change its state from liquid to gas. This regasification process uses propane heated by seawater as the primary heating medium. The gas resulting from the regasification process has a pressure of 55 bar (g) and a temperature of 25 degrees Celsius with the same chemical composition as LNG. The submarine pipeline belonging to NR stretches for ± 15 KM from the FSRU location to the Muara Karang ORF. The transmission pipe with a diameter of 24” is capable of delivering gas up to 500 MMSCFD. The subsea transmission pipeline is a gas delivery channel resulting from the regasification process at the FSRU. The gas is distributed through a 24-inch diameter underwater pipeline of approximately 15 KM from the FSRU to Onshore Receiving Facilities (ORF) in Muara Karang. ORF is located in Muara Karang Pluit in PJB’s 2,100 m2 area. The Muara Karang ORF has 1 input from FSRU NR Satu and 5 outputs for PLN Muara Karang of 350 psi, PLN Muara Karang 620 psi, PLN Tanjung Priok, West Java Distribution PGN and Pertagas Transmission for Muara Tawar PLN.
After receiving the Onshore Receiving Facility (ORF), the gas is distributed to PLN’s power plant in Muara Karang. On September 1, 2013, NR collaborated with PHE ONWJ to optimize the utilization of the PHE ONWJ pipeline facility to supply gas to PLN Tanjung Priok. With the completion of the Phase II project in October 2014, the company can provide up to 200 MMSCFD of gas to the PLN Tanjung Priok power plant through PHE ONWJ’s ORF facility. Using gas, PLN can reduce fuel subsidies from the Government up to trillions of Rupiah. In the early stages, 2012 – 2013, there have been savings of up to RP. 15 trillion. Savings continued to grow in the following years. In addition, the gas is also expected to be utilized by industry in the western part of Java. Gas is distributed to customers of NR, PT PLN (Persero), namely PLTGU Muara Karang, PLTGU Tanjung Priok, PLTG Muara Tawar. They are located in Jakarta Bay (15 KM offshore) with a capacity of 3 MTPA and 500 MSCFD and have been in operation since May 2012. The LNG cargoes are between 125,000 m3 – 157,000 m3, and are operated by Pertamina (60%) and PGN (40%). Gas customers consist of PLN, PGN, and other potential buyers. Not only is this expected to be able to overcome the problem of gas supply needs for PLN’s Power Plants, but the establishment of NR is also intended to support the diversification of gas supply in Indonesia and ultimately contribute to the development of national energy and the rate of economic growth in the country.
Jakarta can also receive its LNG/gas from Lampung’s Floating Storage Regasification Unit (FSRU). FSRU Lampung is owned by Hoegh LNG Partners, a company whose shares are listed on the New York Stock Exchange. FSRU Lampung helps increase natural gas sales volume to PLN Muara Tawar by 20 to 50 BBTUD. Lampung’s FSRU utilization rate is still low, and thus needs to be optimized. LNG that gets passed through Lampung’s FSRU is predominantly bought by Indonesia’s sole off-taker on electricity: PT. Perusahaan Listrik Negara (PLN). PLN needs LNG but must also negotiate with PGN, which manages Lampung FSRU, with regard to the price of LNG. Within the scope of planning by PGN LNG’s Masterplan of New Business Development 2018, the Lampung FSRU is sought to improve energy supply security for the Western region, namely Sumatra, Java, and Bali, in addition to the Makassar FSRU area for Central Indonesia and Gorontalo FSRU for Eastern Indonesia.
Expensive rental fees and using the state budget or government taxes will be very burdensome if the business development and business ecosystem are unsuitable. It will even harm the country. The Lampung FSRU is considered too expensive in rental fees, which is $200,000/day with a 20- year contract. As an illustration, with a rental fee of $200,000/day since 2014, while the production is only 2 – 11 cargoes of LNG, it is very inadequate. Especially with this pandemic, there must be a good and professional business strategy. The low utilization of the Lampung FSRU is also a factor that can influence the views of various parties, especially investors, on PGN’s readiness to realize small-scale LNG investments in the program to convert diesel-to-gas power plants. PGN needs to take careful steps to ensure that the LNG business expansion is well planned and does not add to the financial burden on the company. This caution is taken considering that the Lampung FSRU operating rate displays a meager utilization rate or below 20% in 2019.
In the plan to convert diesel-togas power plants, what remains unclear is how PGN, a subsidiary of a state-owned company with significant public ownership, can survive the procedure. LNG supply chain costs are pretty expensive, especially on a small scale. In the gas industry, which is known to place great emphasis on discipline in investment spending, investors will pay close attention to PGN’s investment history in LNG, including the low utilization rate of Lampung’s FSRU, as well as the history of PLN’s gas demand planning, which often fluctuates. PGN’s lease obligations to the Lampung FSRU have another 13 years to run. However, the unit operates at very low-capacity levels and still has more than $400 million of contractual obligations.