EVALUATION ON DOMESTIC LNG BUSINESS FOR NEW OIL AND GAS STATE-OWNED HOLDING COMPANY

• Main Author: WIDAGDO 29116327, NUGRAHANTO
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/29747
• Institution: Institut Teknologi Bandung

Natural gas is considered as the alternative of fuel in Indonesia. High demand on oil based fuels could not be fulfilled with the decline of oil production. By considering the archipelago of Indonesia, the adequate natural gas mode of transportation is LNG. This is part of Government of Indonesia (GOI) responsibility through its state-owned companies in ensuring distribution ofnatural gas to all areas in the country.With the initiative of the Government of Indonesia to simplify the gas utilization business, Pertamina as the national oil and gas company acquired PGN to form the oil and gas holding. Additionally PGN also acquired Pertamina Gas from Pertamina. This new subsidiary of state-owned enterprise of oil and gas, PGN could have several business issues which need to be evaluated. Those are as follows: <br /> <br /> <br /> <br /> 1. To determine the opportunities and challenges for the gas utilization market, especially for domestic LNG business.Analysis on the opportunities and challenges is required to improve the performance after acquisition. <br /> <br /> <br /> <br /> 2. To evaluate the business sustainability of gas utilization from financial perspectives. The financial performance is the key parameter to determine whether the acquisition can provide positive impacts on company and sustain the gas business particularly for domestic purposes. <br /> <br /> <br /> <br /> <br /> In analyzing the business issues, several tools were used. These include PESTLE, Porter’s Five Forces and SWOT analyses. As a result, three main problems were identified. The first issue is on the requirement to have more infrastructure and strategies so that gas utilization can reach all areas in Indonesia. Then on challenges to find more gas resources to meet the customer and future potential demands, as well as actions to improve management effectiveness. <br /> <br /> <br /> <br /> <br /> In solving the problems, reference from Indonesia’s natural gas demand and supply was utilized. From this reference, it was estimated that by 2030 Indonesia will require approximately 7,806 MMSCFD or 59.83 MTPA of natural gas. Furthermore by measuring the current capacity of domestic LNG supply, it’s still required to build more gas infrastructure, specifically LNG regasification terminals for approximately 45.22 MTPA, which is estimated at least USD 16.32 billions. Next, gas/LNG contracts needs to be established to purchase more gas from uncommitted domestic supply as well as from other countries, notably from Singapore, Qatar or United States for up to 59.83 MTPA.In improving the management effectiveness, several action plans are proposed to be executed. Action plans which need to be prepared are to generate more innovation or unique added value for the product, such as developing more small scale LNG truck facilities. <br /> <br /> <br /> <br /> <br /> Moreover detail implementation plans are prepared to be executed. The action plans are attempts proposed to be conducted as projects.These plans shall show PGN’s commitment to fulfill natural gas demand and support Government of Indonesia program to establish energy security.Hence with PGN’s efforts in implementing the action plans, it is expected that the company could also sustain the natural gas business and increase the company growth. <br /> <br />