PP Holding Migas Waits for Signature of President Jokowi

By : Hariyanto And Aldo Bella Putra | Saturday, February 03 2018 - 17:00 IWST

INDUSTRY.co.id - Jakarta - The Government Regulation (RPP) Holding BUMN Migas has been signed by all related ministers and is now waiting for the signature of President Joko Widodo.

"It has been signed by all relevant ministers and submitted to the President through the State Secretariat, after the signing of the President, the PP Holding of BUMN Migas will be issued," said Muhammad Fajar Sampurno, Deputy of Mining Business, Strategic Industries and Media, when contacted by media crews in Jakarta on Thursday 2/2/2018)

Harry explained that after the official regulation issued, the legal aspect of the formation of holding was only followed by the signing of the deed of the transfer of government shares in PT Perusahaan Gas Negara (PGN) to Pertamina. PGN will become a subsidiary of Pertamina and other subsidiaries.

"But from the corporate aspect after the PP will have to be made Minister of Finance Decision on the value of the transfer," said Harry.

Previously, research institute Wood Mackenzie said, there are a number of benefits that will be obtained by Pertamina if the formation of oil and gas holding is realized, among them, Pertamina can utilize PGN's customer base to expand the company's marketing reach.

At the same time it is expected to avoid Pertamina from the risk of excess Liquid Nature Gas (LNG) contract.

Known, Pertamina has since 2014 signed a contract of import of liquid natural gas (LNG) of 1.5 million tons per year from Cheniere Corpus Christi, a US company.

LNG purchase contract is made because it is estimated that Indonesia needs import gas starting 2019.

In the gas balance prepared by the Ministry of Energy and Mineral Resources, Indonesia needs 1.777 billion thermal units per day (bbtud) of gas imports in 2019, 2,263 bbtud in 2020, 2,226 bbtud in 2021, 1,902 bbtud in 2022, 1,920 bbtud in 2023, 2,374 bbtud in 2024, and 2,304 bbtud in 2025.

However, Pertamina's gas receiving infrastructure is currently insufficient to accommodate and distribute the gas.

If not immediately anticipated, Pertamina is at risk of losses due to lack of adequate gas infrastructure, whereas contracted gas must be absorbed starting 2019.

"This merger will provide access (Pertamina) to PGN's major industrial customers who can ease the risk of oversupply," said Wood Mackenzie research.