Converting to Gas will Save Semen Indonesia IDR 1 Trillion a Year

Oleh Anggita Rezki Amelia 25 April 2016

Semen Indonesia"s massive fuel consumption demands a guaranteed energy supply.

Semen Indonesia
Arief Kamaludin|KATADATA

Semen Indonesia is exploring the idea of using gas supplied by Pertamina to fuel its operational vehicles.

The firms have signed a memorandum of understanding on developing a potential partnership in the oil and gas business. Semen Indonesia’s president director Suparni and Pertamina’s president director Dwi Soetjipto signed the agreement at the Office of the Ministry of State Owned Enterprises, Jakarta, Friday (22/4). 

The partnership between the two firms would cover the development, procurement, and distribution of Pertamina products and service to Semen Indonesia, use of Semen Indonesia’s products by Pertamina, and use of their assets in common work areas. 

Dwi said the conversion from oil to gas could save Semen Indonesia around IDR 1 trillion a year. Currently, Semen Indonesia spends around IDR 3 trillion on diesel fuel. By comparison, gas is up to 30 percent cheaper than diesel. 

The two state firms would also work together in the use of geothermal energy in Aceh. Pertamina would build a 50 MW geothermal power plant in Aceh. The electricity produced from the plant would be piped to Semen Indonesia’s factory in Aceh. 

Dwi explained that this was in compliance with the government directive to reduce the use of fossil fuel. He also said that this partnership would be able to ascertain which energy maximises the efficiencies for the company and environment. “To see which energy is the most efficient, and to look at the environment aspect,” Dwi said. 

Meanwhile, Suparni said that as well as building solid synergy between the two companies, the partnership would support his company’s strategic and operational plans. Semen Indonesia’s massive fuel consumption demands a guaranteed energy supply. 

Semen Indonesia is also developing several new factories. “So with Pertamina, we’ll be preparing for that, planning the supply of fuel, lubricants and other products. We’ll also need geothermal power plants for [our] massive energy requirements,” Suparni said. 

Semen Indonesia is completing development of its two factories in Rembang and Indarung VI, Padang, each with a production capacity of 3 million tons per year. Also, in March Semen Indonesia signed an agreement to form a joint venture with Samana Citra Agung, a cement producer in Pidie district, Aceh.

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