Indonesia’s Pertamina signs CCS, geothermal deals

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Indonesia’s state-owned Pertamina signed deals this week with Chevron, ExxonMobil and Chinese state-controlled Sinopec to develop carbon capture and storage (CCS) and geothermal capacity in Indonesia.

Pertamina has agreed with Chevron to carry out a joint study into the feasibility of CCS and carbon capture, utilisation and storage (CCUS) in east Kalimantan. The firms “have agreed to mutually share information on regions and potential CCS/CCUS developments, encompassing geological and geophysical data, maps, models and interpretations, records, summaries and commercial information,” Pertamina said.

It signed an agreement with ExxonMobil to further their collaboration to develop a CCS hub in the Asri and Sunda basins, located in the western part of the Java Sea. The hub will have a capacity of up to 3 gigatonnes of carbon dioxide (CO2) and an investment value exceeding $2bn, according to Pertamina. It contains saline aquifers that will allow for the injection of CO2 captured from domstic and regional carbon-intensive industries.

CCS/CCUS projects are strategic because “Indonesia holds a significant carbon storage potential, making it highly potential to become a CCS hub or a carbon capture and storage centre in southeast Asia,” said Pertamina’s chief executive Nicke Widyawati. “Fossil energy utilisation in Indonesia remains dominant, indicating significant emissions. Hence it is crucial to focus on CCS/CCUS technologies actively,” she added.

Pertamina’s deal with Sinopec encompasses upstream and downstream business, as well as new and renewable energy. In the upstream sector they will partneron unconventional hydrocarbon development, CCUS, enhanced oil recovery and ultra-deep drilling. Downstream activity will see them work on fuel and non-fuel businesses, lubricants, aviation, petrochemicals, along with transportation and logistics.

Geothermal expansion
Pertamina will also explore the potential of geothermal energy with Sinopec, although more details on what te partnership involves was undisclosed.

Pertamina’s geothermal unit, Pertamina Geothermal Energy (PGE), separately signed a joint study agreement with Chevron and Abu Dhabi-headquartered upstream firm Mubadala Energy to explore geothermal potential in Kotamobagu, north Sulawesi. This could allow for clean energy to be supplied from Kotamobagu to the domestic Indonesian market, as well as allow for the production of low-carbon hydrogen or ammonia, said Pertamina.

The agreement will leverage on “PGE’s experience and scale as the largest geothermal producing company and capacity holder in Indonesia, Chevron’s expansive capabilities as a multinational energy company committed to providing reliable and cleaner energy, and Mubadala Energy’s track record in delivering reliable and efficient energy to Indonesia,” according to Pertamina.

A consortium made up of PGE and Jasa Daya Chevron in June this year won an auction to manage, develop and operate the Way Ratai geothermal working area in Idonesia’s Lampung province. The firms will carry out exploration activity and potentially build a geothermal power plant.

The consortium will also explore the use of geothermal resources for a potential green hydrogen or green ammonia production hub in west Indonesia to supply domestic and export markets, Chevron Indonesia’s country manager Wahyu Budiarto said last month.

Indonesia has the second-largest geothermal installed capacity in the world, according to Pertamina, which is banking on the country’s resources to increase its share of renewable power generation, as geothermal energy allows refiners to lower the carbon intensity of their operations. It launched in February an initial public offering for PGE on the Indonesia Stock Exchange, offering 25pc of the company’s shares and aiming to raise 9.06 trillion rupiah ($588mn) from the listing to support energy transition efforts.

By Prethika Nair