Securing Fertilizer Supply, Petrokimia Gresik Extends HoA with KrisEnergy

14 August 2023 04:30 / Corcom of PG / 2189x viewed

Petrokimia Gresik, a prominent Agroindustry Solution company and a member of the Pupuk Indonesia holding, has solidified its dedication to sustainable development by signing an addendum to extend the Head of Agreement (HoA) in the Road to Gas Sales Agreement (GSA) for Natural Gas. This agreement pertains to the Lengo Block Bulu Field in Tuban, East Java. The signing ceremony, held in Surabaya, featured the CEO of Petrokimia Gresik, Dwi Satriyo Annurogo, and the General Manager of KrisEnergy (Satria) Ltd, Kusmutarto Basuki, representing the Cooperation Contract Contractor (KKKS).

This extension signifies Petrokimia Gresik's pursuit of a secure and stable supply of natural gas. The gas will play a pivotal role in meeting the company's existing needs while supporting its strategic expansion plans. The agreement outlines the potential supply of 150 MMSCFD of natural gas, anticipated to be onstream by the year 2028.

"Dwi Satriyo, the CEO of Petrokimia Gresik, stated, "Petrokimia Gresik is committed to consistently supporting the progress of agriculture in Indonesia by providing various types of fertilizers. One of our main tasks is to fulfill the domestic fertilizer needs, contributing to the realization of the National Food Security Program. To accomplish this task, Petrokimia Gresik requires additional gas to secure existing and future development needs."

The additional gas supply will specifically fuel the development of the Ammonia-Urea Plant (Amurea) III, enhancing Urea production capacity. Amurea III is projected to contribute significantly to the domestic Urea fertilizer production and ensure a stable supply of raw materials for NPK fertilizer. The plant is anticipated to have a production capacity of 2,000 MTPD for Ammonia and 1,725 MTPD for Urea.

"The additional gas supply becomes increasingly crucial, considering the growing demand for Urea due to the policy shift towards subsidizing only two types of fertilizers, Urea and NPK," emphasized Dwi Satriyo.

The timeframe extension follows KrisEnergy's preliminary activities related to the Lengo Field development in the Bulu Working Area. Pending government approval, the key points of this agreement will be formalized in a GSA, with the targeted completion in 2024.

With this agreement, Petrokimia Gresik is poised to receive an additional gas supply of 60 MMSCFD from the Lengo Field in the Bulu Working Area, catering to the natural gas needs of the existing plant. In collaboration with KrisEnergy, the Operator of the Sakti Working Area, a drilling initiative for the West Kepodang-1 Well is set to commence at the end of the current year. This initiative is expected to further augment the gas supply to Petrokimia Gresik by an additional 90 MMSCFD.

Wisnu Suhardono, CEO of PT Satria Wijayakusuma, the sole shareholder of KrisEnergy in Indonesia, emphasized the significance of these changes to the key points of the agreement, marking substantial progress towards the imminent signing of the GSA. He expressed full commitment to supporting the implementation of the Lengo Field development in the Bulu Working Area.

In a parallel effort to ensure the success of the gas supply from the Bulu Working Area, Petrokimia Gresik has inked a Memorandum of Understanding (MoU) with PT Pertamina Gas (Pertagas). This MoU focuses on a collaborative study concerning the planned infrastructure for delivering natural gas from the Lengo Field to Petrokimia Gresik.


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