Indonesia’s natural gas production is predicted to decline, potentially hampering energy transition

Jakarta – The Ministry of Energy and Mineral Resources (EMR) estimates that Indonesia’s gas production will decline in the coming years, even though Indonesia’s natural gas reserves are more than oil reserves. The potential decline in gas supply is a new challenge in securing alternative energy sources because natural gas is essential to bridge the energy transition journey.

Coordinator of the Oil and Gas Program Preparation of the EMR Ministry, Rizal Fajar Muttaqin, said in a written statement that natural gas production is predicted to decline due to the natural decline of existing gas wells.

According to him, the government continues to search for new gas fields through exploration, but this requires time and considerable investment. “Existing supply from producing fields can fulfil the needs of contracted natural gas. If Project Supply and Potential Supply come onstream as planned, it is estimated that there is still gas potential to meet domestic needs,” Muttaqin added.

Gas consumption is still dominated by the domestic industry

Since 2012, according to Muttaqin, domestic gas utilisation has been higher than exports; thus, the government is committed to increasing gas utilisation for domestic purposes and gradually reducing exports to maintain energy security and independence and support economic growth. According to him, in the next ten years, the largest gas consumers will come from the industrial sector, followed by the power and fertiliser sectors.

“The government encourages all natural gas business entities such as transmission and distribution pipelines, LNG receiving terminals and other non-pipeline modes so they can be utilised across sectors,” said Muttaqin.

Data from the Ministry of Energy and Mineral Resources shows that the largest domestic gas consumer is industry, reaching 30.83%, followed by electricity at 11.82%, and fertiliser at 11.72%. Meanwhile, 22.18% of gas is exported in the form of LNG, and as much as 8.45% is exported through pipelines. Total gas consumption by the end of 2023 reached 5,868 BBUTD.

Indonesia is expected to continue to export natural gas in the coming years, mainly to fulfil previously agreed contracts. (Hartatik)

Banner photo: In this sustainable tourism village, PT PGN Tbk built a 3,900-meter gas pipeline to serve 204 household and homestay natural gas network connections in the Borobudur tourism area. Karangrejo Village, Borobudur, Magelang Regency, Central Java, Thursday (24/3/2022). (Hartatik)

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