Pertamina Pioneers the Utilization of LNG for Transportation in Indonesia

| Indonesia, Jakarta

Indominco Bontang in-pit dump trucks to use LNG

84 LNG-powered dump trucks planned for mine operations in Kalimantan

PT Pertamina (Persero), Indonesia’s state owned oil & gas company which is pioneering the use of Liquefied Natural Gas (LNG), is aiming to reduce the consumption of BBM (fuel oil), thereby reducing the cost of State subsidies for fuel. As part of that drive Pertamina, through its subsidiary, PT Badak NGL, has carried out a test of LNG utilization for the Company’s operational vehicles. LNG-fuelled mining dump trucks are also planned.

“Today is the starting point for LNG utilization for transportation and household sector. Starting with the operational vehicles of Badak NGL, it is expected to broaden usage in the future, both in the transportation sector and household sector. Pertamina is committed to develop the required infrastructure for successful LNG utilization,” said President Director of Pertamina Karen Agustiawan, when witnessing the LNG trial at PT Badan NGL, Bontang, via video conference.

Pertamina’s LNG business paradigm, which used to be export-oriented, has begun to shift since commencement of its West Java LNG project (Floating Storage Regasification Unit 1 Nusantara Regas ) operations on 24 May 2012 as the first receiving terminal, storage, and regasification of LNG in Indonesia for electricity generation by Perusahaan Listrik Negara (PLN), a state-owned electricity company. Increased LNG availability has stimulated the development of various applications for domestic LNG use, including the transportation sector and households.

Compared with gasoline and diesel fuel, LNG is more environmentally friendly because it can reduce emissions by about 85%. Furthermore, compared to CNG of the same volume, LNG’s energy density value is 3 (three) times denser.

In Indonesia, the use of LNG as a fuel is also able to reduce vehicle operating costs because the price of LNG is cheaper than non-subsidized diesel fuel. LNG prices in the range USD 18-20 / MMBtu, while the non-subsidized diesel around Rp 9.807 / liter, equivalent to USD 31 / MMBtu. LNG fuel is very suitable for large large vehicles with long operational distances such as buses, trucks, and locomotives, as well as for the sea freight sector.

Pertamina through its subsidiaries, namely PT Pertamina Gas and PT Badak NGL have begun working on the LNG market potential, particularly for mining sector transportation in Kalimantan. In the early stages, both have been cooperating with PT Mandiri Indominco, one of major coal mining companies in Kalimantan, as the end user of LNG. During commissioning stage, aimed to be begin on 1 December 2012, a total of 4 Indominco’s in-pit dump trucks will be using LNG as their fuel, growing to about 84 LNG-fueled high dump trucks at full implementation.

(This article compiled using information from a Pertamina press release)

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