PGN Targets 2027 Delivery of Palm-Waste Biomethane to West Java Industry

Jakarta — Indonesian gas company PGN aims to deliver biomethane made from palm oil mill effluent in South Sumatra to industrial customers in West Java starting in 2027. PGN's gas supply and LNG trading head, Muhammad Anas Pradipta, said on 21 October 2026 that prospective buyers were in place while the project agreement was still being finalised. Development partners Toyota Tsusho and KIS Biofuels Indonesia envisage sales of about 150,000 MMBtu a year. That is a plan, not gas already delivered.

The project creates a potential fuel outlet for a palm-milling by-product, rather than another use for crude palm oil itself. Biomethane is distinct from Indonesia's B50 biodiesel: the announced feedstock is palm oil mill effluent, or POME, while B50 blends palm-derived biodiesel into conventional diesel. PGN's pipeline network is intended to carry the South Sumatra gas to customers in West Java.

Buyers identified, commercial supply still ahead

According to separate reports by ANTARA and Bisnis.com quoting Anas, PGN is targeting a 2027 start. He said Japanese companies were involved on both the supply and prospective buyer sides. Bisnis.com reported that the related agreement was being concluded. None of this establishes that commercial deliveries have begun.

In a 6 October company statement, Toyota Tsusho said it and PT KIS Biofuels Indonesia had established their joint venture, PT KIS Toyota Tsusho Biomethane Indonesia (KTBI), in September 2026. KTBI intends to upgrade biogas from POME at a South Sumatra palm oil mill into biomethane, then transport and sell it. The partners aim to begin commercial operations in 2027, with planned annual sales of approximately 150,000 MMBtu to West Java customers, including manufacturers, via PGN's pipelines.

An earlier ANTARA report said construction of the facility was launched on 5 October and described PGN as the principal buyer and pipeline transporter. Toyota Motor Manufacturing Indonesia was among the intended users named in PGN's earlier account. Anas did not disclose detailed buyer identities or contracted volumes in the 21 October reports, however. The joint venture's annual sales ambition should therefore not be presented as a realised supply contract.

Palm waste supply may vary with the harvest

Anas warned that output from palm-mill waste may fluctuate with harvest seasons. To illustrate, he described an average production level of one million standard cubic feet a day potentially varying between two million and half a million at different times. Those numbers were an example given by the executive, not a confirmed capacity for the KTBI plant. PGN is considering a foundation buyer alongside options to absorb additional supply as volumes change.

Toyota Tsusho describes a process that upgrades POME-derived biogas into biomethane. The company says the resulting fuel can use existing gas equipment and pipelines. Capturing methane associated with mill effluent and displacing some fossil gas could reduce emissions, according to the company, but the sources reviewed do not provide measured emissions savings from this project.

Why it matters to Indonesia's palm supply chain

This initiative seeks value from a palm-processing waste stream without showing that it will replace the feedstock required by B50 biodiesel. The two fuels serve different customers: biomethane for gas users and palm biodiesel for diesel blending. Nor does a prospective POME project by itself establish a change in crude palm oil prices or CPO demand. That distinction matters when assessing the palm industry's energy investments.

The next test is whether commercial agreements are completed, the facility becomes ready and deliveries to West Java materialise in 2027. Until operating data are available, the 2027 timetable and 150,000 MMBtu annual sales figure remain company targets.