Japan’s power firm and LNG trader, Jera, has signed a memorandum of understanding with a unit of Indonesia’s state power company PLN to collaborate on liquefied natural gas procurement.
Besides LNG procurement and optimization, the MoU with PLN Energi Primer Indonesia (PLN EPI) provides for collaboration in the development and operation of LNG receiving terminals in anticipation of growing demand for LNG in Indonesia, according to a statement by Jera.
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, the joint venture of Tokyo Electric and Chubu Electric said.
PLN EPI is a fuel procurement and transportation operator for PLN, Indonesia’s largest power company.
Jera said 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, the firm said.
Jera recently also signed a deal with Indonesia’s state-owned energy firm Pertamina to invest in LNG infrastructure.
Jera’s unit in Indonesia launched its operations in August last year.
According to its website, Jera handles about 40 million tons of LNG annually, among the largest transaction volumes in the world.