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Indonesia state gas company PGN signs LNG supply deal with Sinopec

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Indonesia state gas company PGN signs LNG supply deal with Sinopec

Jakarta — Indonesia's state-owned gas utility Perusahaan Gas Negara or PGN has signed a short-term deal to supply LNG to China's state-run Sinopec in 2020, PGN's strategy and business development director Syahrial Muktar said earlier this week.

PGN, which handles gas transmission and distribution, will supply at least six LNG cargoes to the Chinese refining giant, with the first shipment expected to start by early January 2020, Muktar said.

He said PGN will supply the LNG cargoes either from domestic or international sources.

"We expect to be able to explore more LNG sales and LNG infrastructure development opportunities, such as regasification terminals and bunkering, with this deal," Muktar said, adding that China has potential for high gas demand growth.

He said that the Sinopec agreement was a significant development for PGN to meet its objective of becoming a global LNG player, following the government's decision to merge PGN with state-owned national oil company Pertamina.

Pertamina has assigned PGN to manage Indonesia's LNG business, including the integration of the county's gas and LNG businesses across the midstream and downstream segments to maximize efficiency, he said.

-- Anita Nugraha, newsdesk@spglobal.com

-- Edited by Wendy Wells, wendy.wells@spglobal.com