Japan’s largest power generation company JERA has signed a memorandum of understanding (MoU) to collaborate on LNG value chain development in Indonesia with PT PLN Energi Primer Indonesia (PLN EPI), a subsidiary of PT PLN Persero.
Collaboration to establish a value chain for LNG, which plays an important role as an energy transition fuel, is expected to help Indonesia achieve both a stable supply of electricity and energy transition, as well as to contribute to achieving net zero emissions by 2060.
PLN EPI is a fuel procurement and transportation operator for PLN, Indonesia's largest power company.
The MoU provides for collaboration in LNG procurement, optimization and the development and operation of LNG receiving terminals in anticipation of growing demand for LNG in Indonesia.
By utilizing JERA’s LNG expertise, JERA and PLN EPI will establish an LNG value chain for the power segment in Indonesia and will also study the possibility of converting to a hydrogen and ammonia value chain.
Indonesia is expected to see continued increases in its demand for electricity due to its robust economic growth.
On the other hand, the country is highly dependent on coal-fired power generation, and there is concern about the increase in greenhouse gas emissions that will accompany the increase in electricity demand and accordingly importance of LNG as an energy transition fuel is increasing.