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CORPORATE ACTION - JAKARTA. PT Perusahaan Gas Negara Tbk (PGN), on Tuesday (19/12), signed a Gas Sale and Purchase Agreement (PJBG) with Medco E&P Grissik Ltd. The Pertamina Gas Subholding, coded as PGAS, will obtain a volume of approximately 410 BBTUD sourced from the Corridor Block, South Sumatra.
PGAS CEO Arif Setiawan Handoko revealed that this contract has a term of five years and is an extension of the previous agreement that has been in place for 20 years. The previous agreement ended on September 30, 2023.
"This is proof of the commitment of the Government, KKKS (Contractor Cooperation Contract) and PGN in serving the industry and retail, especially natural gas users along Sumatra Island, West Java and Riau Islands," said Arif in a release broadcast on Tuesday (19/12).
The gas volume to be distributed will be used for various consumers. Including the electricity sector, industry, medium and small businesses, transportation and households.
"This agreement will support operations and energy services and encourage customer performance to be more competitive in business and competition both domestically and internationally," added Arif.
In meeting the needs of existing and future demand, PGAS continues to strive for supply resilience for the same service level, through pipeline gas or Liquified Natural Gas (LNG). With the challenges of economic and business growth ahead, the use of natural gas through pipelines or LNG is projected to increase.
As of the third quarter of 2023, the total volume of natural gas trade reached 935 BBTUD with the main contribution from pipeline gas supply. This figure serves the demand for natural gas from 3,019 industries and commercials, 1,967 small businesses and 834,165 households.
"PGN hopes that this agreement will provide certainty for the continuity of business for stakeholders in the natural gas business chain, then increase business competitiveness and sustainable national economic growth," concluded Arif.
Previously, on Thursday (14/12) PT Medco Energi Internasional Tbk (MEDC) announced that it had received approval from the Ministry of Energy and Mineral Resources (ESDM) for the amendment of the new Corridor Block Production Sharing Contract (PSC).
The Corridor Block PSC will return to being a PSC Cost Recovery, with better terms to ensure the economics of development from several new developments and maintain further exploration in the block.
The total daily gas delivery based on the contract from the block currently reaches ~700 BBUTD, with 83% sold to domestic buyers and 17% exported to Singapore. The allocation and price of gas for three gas buyers have also been approved, including for PGN.
"This agreement is a significant step forward in ensuring the stable and sustainable future of the Corridor Block," revealed Medco E&P CEO Ronald Gunawan.
Regarding stock performance, in trading on Tuesday (19/12) PGAS closed up 2.82% to the level of Rp 1,095 per share. Meanwhile, MEDC's price increased by 1.36% to the position of Rp 1,115 per share.
