Indonesia's PERTAMINA-PGN to merge: what are the implications?



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Report summary

PGN (Perusahaaan Gas Negara) held an extraordinary shareholder meeting on Thursday, 25 January 2018, as requested by Indonesia's Minister of State-owned Enterprises. The meeting approved the transfer of the government's 57% share in PGN to PERTAMINA, paving the way for PGN to merge with PERTAMINA. Subsequently, PGN will acquire Pertagas, PERTAMINA's subsidiary in gas transportation and distribution. We view the merger as positive for PERTAMINA and PGN, given the complementary gas pipeline businesses, and the potential for corporate synergies. However, the combined company, will have a dominant position across the whole gas value chain – from upstream, to midstream and downstream. Abuse of this dominant position, to the detriment of other market participants, could be a real risk unless supported by additional regulations. Third-party access to pipelines, or a monopolistic approach to negotiations with upstream producers are key risks to be mitigated.

What's included

This report contains

  • Document

    Indonesia's PERTAMINA-PGN to merge: what are the implications?

    PDF 294.53 KB

Table of contents

  • What's happened
  • Background
  • Implications
    • Appendix: PERTAMINA and PGN's key financial figures

Tables and charts

This report includes 2 images and tables including:


  • PERTAMINA and PGN's positions in the gas market
  • Indonesia's PERTAMINA-PGN to merge: what are the implications?: Image 2

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