KUALA LUMPUR: Renewable energy company reNIKOLA Holdings Sdn Bhd, through its Indonesian subsidiary PT reNIKOLA Primer Energi (PTRPE), has signed a long-term compressed biomethane gas (CBG) sales agreement with PT Pertagas Niaga (PTGN), a subsidiary of PT Pertamina Gas (Pertagas), in advancing Indonesia's renewable gas industry.

In a joint statement, the companies said the agreement establishes the commercial foundation for CBG produced from eight palm oil mills owned by PT Perkebunan Nusantara IV (PTPN IV) and marks a step towards developing Indonesia's first biomethane-to-gas-grid ecosystem. 

"The project is the first and largest clustered biomethane development, aggregating renewable gas from eight palm oil mills into a single supply network. 

"Upon completion, the project is expected to produce more than 830,000 million British thermal units (MMBtu) annually, with an investment of US$40 million,” according to the statement. 

PTRPE chief executive officer and director Dr Amran Yusof said the agreement is a major milestone in its efforts to unlock the value of biomethane in Indonesia. 

"By bringing together feedstock suppliers, gas infrastructure providers and long-term market demand, we are establishing a scalable biomethane ecosystem that demonstrates how agricultural waste can be transformed into a reliable source of renewable energy,” said Amran. 

Under the agreement, PTGN would serve as the long-term off-taker for the CBG produced by PTRPE for 15 years. 

The renewable gas would be supplied to industrial consumers through the existing natural gas distribution network. 

As part of the collaboration, Pertagas would develop Indonesia’s first dedicated biomethane injection station near the Sei Mangkei Special Economic Zone. 

This facility would connect biomethane production facilities to the national gas distribution network, enabling broader access to renewable gas.

By capturing methane emissions from palm oil mill effluent (POME) that would otherwise be released into the atmosphere, the project is estimated to reduce greenhouse gas emissions by 320,000 tonnes of carbon dioxide (CO2) equivalent annually, equivalent to avoiding the combustion of 161 million kilograms of coal each year. 

The development is also expected to create hundreds of job opportunities in Indonesia, supporting regional economic growth. - Bernama