Indonesia’s state oil company Pertamina’s new unit, Pertamina International Shipping (PIS), is looking to spend $4 billion in the next seven years to refurbish its fleet of vessels and upgrade terminals, a top official said on Friday.

The new unit plans to replace 23 vessels and expand its fleet, to ensure compliance with the latest International Maritime Organization standards and eventually serve other regional companies, said its director of business planning, Wisnu Medan Santoso.

“There are many oil and gas players in ASEAN who do not have their own shipping arm, we see this as an opportunity,” Wisnu told Reuters, referring to countries of the Association of Southeast Asian Nations.

“We have a large captive cargo, we have a large economy of scale. We can utilize that to capture opportunities in ASEAN,” he said, adding that only 5% of PIS’ clients are non-Pertamina companies currently.

PIS is one of the new “sub-holding” units created by Pertamina last year, as part of a government effort to revamp hundreds of state companies.

Pertamina had said last year that the newly created units, including PIS, are slated to launch initial public offerings within two years.

“Capital expenditure cannot rely on external loans 100%. The method may vary… the important thing is that our plan is firm,” Wisnu said.

Pertamina earlier this month was put on a watchlist for removal from JPMorgan’s ESG EMBI index after its scores fell below a required threshold for inclusion.

Wisnu said that PIS will progress to be a green shipping company and gradually wean off transporting just fossil fuels.

“In the long run we will try to reduce (our) dependence on fuel cargo transportation… we must diversify,” Wisnu said.

(Reporting by Bernadette Christina Munthe and Fathin Ungku; Editing by Martin Petty)

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