JERA and Pertamina to collaborate on low-carbon fuels value chain

Japanese energy giant JERA and Indonesia’s largest state-owned oil and natural gas company Pertamina have signed a memorandum of understanding (MoU) to collaborate on business opportunities for infrastructure investment in low-carbon fuels such as LNG and hydrogen/ammonia.

Illustration only; Archive. Courtesy of JERA

JERA and Pertmina announced the MoU on December 15, which was signed under the banner of the ASEAN-JAPAN Economic Co-Creation Forum as a related event of the Asia Zero Emission Community (AZEC) Leaders Meeting.

The agreement outlines information sharing and discussions to enhance the value of the fuel value chain and to create business opportunities for infrastructure investment in LNG and hydrogen/ammonia.

The collaboration will include LNG and hydrogen/ammonia transportation and LNG receiving terminal operation and maintenance, as well as capacity building through benchmarking, training, and/or exchange to improve the operational efficiency of LNG handling. In addition, the parties will also consider the development of new businesses related to carbon capture utilization and storage (CCUS).

Through this collaboration, JERA and Pertamina expect to contribute to Indonesia in achieving net zero emissions by 2060. 

The companies also noted they will work to solve the short- to medium-term issue of increasing energy demand while also steadily promoting the medium- to long-term issue of energy decarbonization through collaboration on LNG and hydrogen/ammonia value chains in Indonesia.

JERA has been working to support energy transition in Indonesia by conducting research and providing support for the formulation of a decarbonization roadmap for the country’s power sector.

Steven Winn, Senior Managing Executive Officer and Chief of Global Strategist of JERA, said: “We understand that gas and LNG are key to the process of decarbonization in Indonesia. The decarbonization roadmap is not a one-size-fits-all guideline but needs to be custom-tailored for each country. Therefore, we will provide our cutting edge solution to the energy issues in Indonesia and strengthening their value chains for greener fuels. This MOU allows us to leverage our experiences and capabilities to help Indonesia achieve net zero emission.”

“We recognize gas and LNG as pivotal transitional energy sources, anticipating significant advancements in major gas projects within Indonesia. Additionally, our collaborative efforts extend to Low Carbon Fuel, through the development of Green Hydrogen/Ammonia projects, aimed at facilitating power producers in their decarbonization efforts through fuel substitution,” stated A. Salyadi Saputra, Director of Strategy, Portfolio & New Ventures of Pertamina.

During the COP28 in Dubai, Pertamina and Turkey’s Karpowership formalized a general partnership agreement (GPA) to develop sustainable energy infrastructure in Indonesia, focusing on floating LNG development, LNG infrastructural projects, as well as the development of alternative fuel sources, including hydrogen, ammonia, methanol, and other biofuels.