Innovation

MEPM, a subsidiary of PT Medco Energi Internasional, Tbk. (MEDC), operates onshore exploration and productions business located southeast the Arun Field, to supply gas 58BBTUD to PT Pertamina (Persero) through 42 km pipeline. 

To achieve sustainable energy optimization, the company adopted an innovative strategy to reduce reliance on fossil fuel-based power generation. Historically, the company has depended on gas turbine generators to power its upstream asset in East Aceh. However, by utilizing the over-capacity of the national grid system, where excess electricity supply reaches 260 MW out of 822 MW (and is projected to increase to 1,112 MW by the end of 2024 from Peusangan Hydropower), MEPM has transitioned to a more sustainable energy source.

The key innovative actions include converting 1.8 MMSCFD of fuel gas into sales gas, generating additional revenue while reducing unnecessary gas combustion. Additionally, the company is purchasing 5.19 MW of electricity from the national grid, replacing power from gas turbines with zero emission and more cost-effective electricity.

For further enhance energy integration, the company is optimizing power distribution across its operational facilities, improving efficiency and reliability. By reducing dependency on fossil fuels, the company is lowering emissions while ensuring operational stability without disruptions. These measures collectively demonstrate company commitment to energy efficiency, sustainability, and economic optimization, setting a benchmark for responsible energy consumption in the oil and gas sector.

The benefits of innovation extend beyond the company itself. They lead to an increase in national grid system base load generation capacity, which enhances the efficiency of excess capacity of their generators. This, in turn, generates additional income that can be used to improve service level and coverage. With the expansion of transmission and distribution networks, the national grid system can provide broaden services to the general public and increase the accessibility of affordable energy for all in terms of national development.

Step-down transformator as part unit distribution of national grid system

Inspiration

The leadership behind Medco E&P Malaka (MEPM) was driven by a strong commitment to sustainability, innovation, and operational efficiency. The transition from gas turbine-generated power to utilizing the over-capacity of the national grid system was not just a business decision but a visionary step toward a more responsible energy future.

According to Mr. Nyoman, “We saw an opportunity to reduce our carbon footprint while optimizing costs. By leveraging the excess capacity in the national grid, we could make a real impact—both environmentally and financially.” This perspective highlights the strategic and sustainability-driven mindset behind the decision.

MEPM also emphasized the importance of long-term energy security and economic benefits, Instead of relying solely on gas turbines, MEPM found a way to contribute to national energy efficiency. MEPM ensures operational stability while enhancing grid system utilization, allowing more communities to benefit from affordable electricity.

Additionally, the motivation behind this initiative stemmed from a broader corporate responsibility to support Indonesia’s energy transition. Sustainability is no longer an option—it’s a necessity. As an energy company, MEPM recognize their role in shaping a cleaner future.

This forward-thinking leadership has positioned MEPM as a benchmark for sustainability in the oil and gas sector, demonstrating how business and environmental goals can align for a greater impact.

Overall impact

The integration of national grid electricity into MEPM operations has yielded significant environmental, operational, social, and financial benefits, setting a benchmark for sustainable industrial energy practices.

1. Environmental impact: The project has cut annual CO₂ equivalent emissions by 36,000 tons, supporting Indonesia's climate goals. By reducing fossil fuel use, it improves air quality and benefits local communities. Additionally, optimizing power usage enhances energy efficiency in the national grid power generation, reduces pollution, and promotes sustainable operations.

2. Operational impact: transitioning from gas turbine-generated power to grid electricity improves energy efficiency and reduces strain on equipment. This change leads to lower maintenance costs and longer equipment lifespan. By using a well-managed national grid, the company secures a stable energy supply and gains flexibility in adjusting energy consumption based on operational needs, minimizing fuel dependency.

3. Social impact: The expansion of the national electricity grid is enhancing access to affordable energy in East Aceh and nearby areas. This improvement will raise the electrification ratio in Nanggroe Aceh Darussalam (NAD) from 99.17% in 2023 to 99.27% by 2026. It also reduces emissions, improving air quality and lowering health risks from fossil fuel pollution. The company's sustainability commitment promotes cleaner energy solutions and supports a national energy transition.

4. Financial impact: the initiative significantly reduces costs by lowering reliance on fuel-based power generation. MEPM has achieved annual savings of at least USD 4 million through reduced fuel expenses and increased gas sales revenue. Additionally, lower operational and maintenance costs enhance financial sustainability, while decreased fossil fuel dependence minimizes exposure to volatile energy prices, creating a more resilient and profitable business model.

5. Stakeholder benefits: the company leverages excess capacity from the national grid to enhance the fiscal sustainability of Indonesia’s power infrastructure. By distributing surplus electricity, it reduces energy waste and serves as a model for other industries to transition to cleaner, grid-based energy solutions, decreasing reliance on fossil fuels. This initiative also improves the efficiency of the overall power generation and distribution network.

This initiative strengthens company reputation as a forward-thinking, environmentally responsible company while setting the foundation for long-term sustainable energy consumption in the oil and gas sector.

Business benefit

This initiative positions the company as a leader in the sustainable energy transition as part of their operational excellence. By optimizing energy use, reducing emissions, and improving efficiency, the company upholds its commitment to responsible governance while remaining profitable. Monetizing excess fuel gas and lowering operational costs through grid electricity enhances MEPM competitiveness and sets an example for other industrial projects balancing economic and environmental goals.

Social and environmental benefit

MEPM is enhancing the environment by reducing fossil fuel consumption, demonstrating that industries can adopt sustainable energy solutions without sacrificing efficiency. This transition also supports electrification in East Aceh, improving access to affordable energy for local communities. The company’s commitment to energy efficiency and emission reduction aligns with Indonesia’s sustainability goals, serving as a model for others. It showcases how corporate innovation and government collaboration can lead to meaningful advances toward a low-carbon future.

Interview

I Nyoman A Sidimantra, Vice President of Health Safety & Environment PT Medco Energi Internasional, Tbk.