Enhancing the Competitiveness of LNG Retail Business in East and Central Java (Case Study: PT Perusahaan Gas Negara Tbk.)

Abstract

The role of natural gas is increasingly significant, especially in substituting the use of petroleum. Liquefying natural gas into LNG is a way to transport natural gas when transporting by pipeline is not feasible. LNG can be stored, shipped by sea transportation, and distributed using land transportation. The market of LNG sold in retail-based is very potential because of the encouragement from the Government to reduce LPG imports and optimize existing domestic LNG sources. To penetrate the potential market, a business strategy for PGN’s LNG retail business in East and Central Java shall be defined. AFI strategy framework is used to effectively manage the business strategy formulation process. The business issue exploration resulted in the formulation of a complete set of strategy and business model canvas which will serve as a blueprint for a strategy to be implemented through organizational structures, processes, and systems. Findings and validations also resulted in several improvements in the midstream value chain that can increase the competitiveness of the LNG retail business.

Keywords: AFI framework, business strategy, competitiveness, LNG, retail