The decrease in piped gas supply from various oil and gas fields necessitates alternative solutions to meet domestic industrial demand, with utilization of Liquefied Natural Gas (LNG) being one of them.
Recent reports indicate a deficit in piped gas supply in Indonesia’s western regions, including central Sumatra, southern Sumatra, and western Java, attributed to the natural decline in gas production from aging fields.
Minister of Energy and Mineral Resources, Arifin Tasrif, acknowledged the gas supply deficit in the western regions and highlighted the government’s efforts to accelerate the development of gas pipeline infrastructure to redirect excess gas supply from East Java to the western regions.
To address the gas deficit, the government plans to increase LNG supply by 11 cargoes to meet industrial demand in the western regions. This LNG will be sourced from the Tangguh LNG plant in Bintuni Bay, West Papua. However, it’s important to note that LNG tends to be more expensive compared to piped gas due to additional costs associated with liquefaction, transportation, storage, and regasification.
