Japanese energy giant JERA has signed a memorandum of understanding (MOU) with PT PLN Energi Primer Indonesia (PLN EPI) to collaborate on the development of the LNG value chain in Indonesia.

This partnership aims to meet the growing LNG demand in the country and explore the potential for a hydrogen and ammonia value chain.

The MOU outlines cooperation in LNG procurement, optimisation, and the development and operation of LNG-receiving terminals.

JERA will leverage its LNG expertise to establish a robust LNG infrastructure for Indonesia's power sector.

In a press statement, JERA said: “By utilising 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.”

Indonesia's economic growth is driving an increase in electricity demand, which is currently heavily reliant on coal-fired power generation.

This reliance raises concerns about the rise in greenhouse gas emissions. The introduction of LNG as an energy transition fuel is seen as a crucial step in addressing these environmental challenges, JERA said.

The partnership is also aligned with Indonesia's commitment to achieving net-zero emissions by 2060.

Last year, JERA signed a MOU with Korea Gas Corporation (KOGAS) for cooperation in the LNG business.

The parties agreed to discuss options for mutual collaboration in the LNG sector, including LNG swaps, trading, ship optimisation, and market view exchange.

JERA and KOGAS, which are among the largest buyers in the global LNG market, are looking to create joint plans for LNG supply and demand to improve energy supply in Japan and Korea.