PROPOSED BUSINESS STRATEGY OF BIOMETHANE TRANSPORTATION AND TRADING IN RIAU PROVINCE FOR PT PERUSAHAAN GAS NEGARA TBK.

• Main Author: Fahrudin, Ali
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/80876
• Institution: Institut Teknologi Bandung

Indonesia is the largest global palm oil producer, contributing to 59% of the world's palm oil supply, with a staggering Crude Palm Oil (CPO) production of approximately 46.9 million tons in 2021. However, this extensive production generates a significant environmental challenge in the form of Palm Oil Mill Effluent (POME), estimated at 156 million m3 annually. POME treatment installations release Biogas, predominantly composed of Methane (CH4) ranging from 50% to 75%, a potent Greenhouse Gas (GHG) with a global warming potential 28 times greater than CO2 if released into the atmosphere. Conversely, Methane is the primary component of Natural Gas, widely utilized in various sectors, including households, commercials, industries, and power plants. Through appropriate treatment, POME-derived biogas can be upgraded into Biomethane, a clean and carbon-negative alternative suitable for integration into the Natural Gas Grid or as a substitute for conventional fossil fuels. The potential for converting POME to biomethane is estimated at 1,280 MWe, equivalent to 288 MMSCFD CH4. Despite the vast potential of biomethane from POME, its current utilization is primarily restricted to self-use within palm oil mills or power plants, even in Riau Province, which boasts the largest palm oil plantation area in Indonesia. Additionally, a survey conducted by PGN revealed the willingness of potential customers in Riau Province to adopt natural gas, but this still needs to be realised due to infrastructural limitations and economic scale challenges. Consequently, this research aims to formulate an optimal distribution scheme that maximizes economic value to serve the potential market in Riau Province, along with sustainable strategies for the biomethane business in the region. The research methodology involved quantitative and qualitative data collection techniques, including literature and desktop studies, interviews with Pipeline and CNG Business Entities, and distribution of questionnaires to five potential biomethane customers in Riau Province. Subsequently, the gathered data underwent thorough analysis employing geographical analysis, transportation cost ii modeling, financial modeling, SWOT analysis, and risk analysis. The outcomes provide insights into optimal palm oil mill locations for biomethane plants, preferred transportation modes, activity system models, and business canvas modeling. This research highlights that trucking is the optimal distribution mode for biomethane, from palm oil mills to scattered commercial and industrial customers. The economic viability of biomethane utilization is highly sensitive to the volume of biomethane. Therefore, strategies to maintain stability or increase sales volume are crucial for the sustainable development of the biomethane industry. In the case of Riau Province, four prospective gas customers with a daily demand of 11,248.93 m3 can potentially be served with biomethane at a more affordable price than LPG or Diesel Oil. This can be achieved by selecting palm oil mills within a maximum 76 km radius and targeting customers with gas demands exceeding 1000 m3 /month. Considerations such as price, guaranteed supply, and operational continuity play a pivotal role in serving customer needs effectively. This research provides valuable insights into overcoming challenges and optimizing biomethane business in Riau Province, Indonesia. The proposed model can be implemented to present a sustainable business approach for the broader adoption of biomethane business in Indonesia