PGN set to supply biomethane for Singapore data centres

Indonesian natural gas transportation and distribution company PT Pertamina Gas Negara (PGN) is gearing up to supply biomethane to power data centres planned by NeutraDC Singapore, the Singapore unit of PT Telkom Data Ecosystem.

The partners, which signed a memorandum of understanding, have not disclosed any details on the volume of supply.

According to PGN, it will produce biomethane – also known as bioLNG or renewable natural gas in some contexts – from palm oil mill effluent as part of a broader strategy to capitalise on low-carbon energy opportunities within Singapore.

“[The partnership] shows the potential for wider biomethane distribution while fostering a clean energy ecosystem to meet national transition targets,” said Rosa Permata Sari, Director of Strategy and Business Development at PGN.

These targets have been outlined in PGN’s ‘Step Out’ strategy, which aims to harness the assets of Pertamina subholdings to expand into low-carbon businesses.

The company, which has said it views biomethane as a “quick win” renewable fuel, expects to begin supplying biomethane to customers in West Java using its existing infrastructure by 2027.

Biomethane holds the potential to provide a dispatchable and sustainable alternative to traditional energy sources. It can directly fuel gas engines in data centres and, when used in fuel cells, biomethane converts into electricity and heat with minimal emissions. Data centres can also draw biomethane from existing gas networks.

“Indonesia, with its vast agricultural resources, has significant potential to develop biomethane as part of the clean energy transition,” added Sari.

Singapore plans to add at least 300MW more of data centre capacity to the existing 1.4GW of combined computing capacity of more than 80 data centres in Singapore.

However, there are concerns over the high energy consumption of data centres. According to a study in Nature, data centres accounted for roughly 1.5% of global electricity consumption in 2024 and will use twice as much energy by 2030 with artificial intelligence driving a major portion of future energy demand.

As part of its Green Data Centre Roadmap launched in May 2024, the Singapore government is aiming for all data centres in the country to achieve a power usage effectiveness performance of less than 1.3 at 100% IT load and to use only energy efficient IT infrastructure.

There has also been a raft of government initiatives to encourage energy efficiency in data centres. This includes the Investment Allowance for Emissions Reduction, which is granted on capital expenditure incurred for energy efficient or green data centre projects.

Another is REG(E), which offers support to data centres to reduce carbon emissions, and the Energy Efficiency Grant, which offers businesses co-funding to invest in energy-efficient equipment.