Indonesia towards Gas and LNG A glimmer of hope to achieve Net-Zero Emissions

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Pertamina
(Source: Pertamina)

In addition to focusing on the energy transition, it is essential for G20 members to take on concrete actions to improve mitigation mechanisms and resilient energy supplies, including in developing countries that have been severely affected by the recent increase in energy prices. A secure and resilient energy supply chain for all available energy sources is critical for future energy security and achieving NZE targets. 

The Indonesian government also realizes that to ensure energy security, it must cooperate with all parties. Through joint global cooperation, the use of cleaner energy, such as gas, can be increased and encourage the application of innovative clean technologies, such as Carbon Capture and Storage (CCS)/Carbon Capture Utilization and Storage (CCUS), to realize a reliable and sustainable energy transition. 

To enhance international cooperation, the G20 Indonesia 2022 Presidency has established three pillars that are considered relevant to today’s global challenges, namely, Global Health Architecture, Digital Economy Transformation, and Sustainable Energy Transition. These three pillars are expected to actualize the central theme of the G20 Indonesia Presidency, namely, Recover Together, Recover Stronger. Furthermore, the Sustainable Energy Transition pillar has determined three main priority issues, namely, access, technology and financing. These three priority issues are essential aspects in responding to the interrelated challenges of economic growth, energy security, and climate change. To ensure energy security, appropriate supporting policies and investments are needed. Indonesia must collaborate in taking concrete actions to maintain energy security during the energy transition between G20 members and others. 

Satya Hangga Yudha Widya Putra
Satya Hangga Yudha Widya Putra, B.A. (Hons), MSc, is the Co-Founder of the Indonesian Energy and Environmental Institute (IE2I) and the Secretary General of the Organization of LPDP Scholarship Recipients / Mata Garuda 4.0

Since it was first produced in 1965, the need for natural gas for households in Indonesia has continued to increase. Previously, gas was mainly exported. Currently, more than 60% of Indonesia’s gas production is used to meet domestic needs. In the National Energy Plan, natural gas is targeted to reach a 24% portion of the national energy mix by 2050. Indonesia’s gas reserves are among other factors determining the target. To meet domestic needs, especially those of industry and power generation, the government continues to improve infrastructure development and construction of gas pipeline transmission. 

Furthermore, developing small-scale liquefied natural gas (LNG), regasification terminals, and gas pipelines to secure energy supply in areas constrained by geographical factors, such as on small islands, especially those located in the eastern part of Indonesia, is critical. Indonesia targets natural gas production of 12 BSCFD in 2030. Based on measurements of the Indonesian Gas Balance, it is estimated that there is a potential surplus to supply the needs of new domestic industries or for export. 

Natural gas potential in Indonesia is quite promising, with proven reserves of around 41.62 TCF. Although its own resources are insignificant compared to world reserves, Indonesia still has 68 potential unexplored basins that are offered to investors. Based on the Indonesia Gas Balance 2022 – 2030, Indonesia will be able to meet domestic needs from existing oil and gas fields. In the next ten years, Indonesia will also experience a gas surplus of up to 1715 MMSCFD, from several potential projects. 

Indonesia can optimize the role of LNG. As projected in Indonesia’s LNG Balance, there will be an increase in LNG production in 2028. In the next ten years, Indonesia will experience a gas surplus of up to 1715 MMSCFD from several potential projects, in various parts of the country. These projects include Masela, which will start production after the middle of this decade, and the Indonesia Deepwater Development (IDD) Project, which is expected to support the production of LNG Bontang. In addition, the Andaman and Agung Work Areas are expected to contribute in the long term. 

Bontang LNG production in 2026 is estimated at 27.7 cargoes. In the following year, production will increase to 56.2 cargoes. After the completion of long-term LNG exports in 2025, all LNG production is expected to have not been contracted. Meanwhile, for production from the Masela Block, it is estimated that in 2028, LNG production is estimated at around 149.2 cargoes, and until 2035, production is relatively stable.