Indonesia to stop exporting natural gas by 2036 to meet domestic needs

Indonesia’s natural gas exports are expected to stop in 2036 and be diverted 100 percent to meet domestic needs, in accordance with the mandate of the Government Regulation Number 79 of 2014 concerning National Energy Policy.

 

Jakarta (Indonesia Window) – Indonesia will no longer export its natural gas by 2036, and instead use 100 percent of this kind of energy production to meet domestic needs, in accordance with the mandate of the Government Regulation Number 79 of 2014 concerning National Energy Policy.

“We will no longer export gas in 2036 as we will use it domestically, as long as the infrastructures are completed,” Secretary General of the National Energy Council (DEN) Djoko Siswanto said at the Road to CNBC Indonesia Awards event here on Tuesday (Oct. 31), as quoted from the official website of the Ministry of Energy and Mineral Resources (ESDM).

Djoko said that to realize the plan, the government is boosting the development of natural gas supporting infrastructures, including the constructions of the Cirebon-Semarang (Cisem) and Dumai-Sei Mangke natural gas pipelines.

These projects will be funded with the State Revenue and Expenditure Budget (locally known as APBN) through a multi-year scheme. The budget for the constructions are 4.47 trillion rupiahs for the Cisem gas pipeline and 6.6 trillion rupiahs for Dumai-Sei Mangke.

“With the development of natural gas pipeline infrastructures, the use of natural gas for domestic needs is expected to increase,” Djoko said, adding that the natural gas network for households is also constructed.

“Now there are almost 900,000 household connections, with 80 percent of which funded by APBN, and the remaining 20 percent carried out by PT. PGN (the national state-owned of gas company),” he explained.

Meanwhile, in order to increase gas utilization for domestic needs, the government has set the price of industrial gas at 6 U.S. dollars per MMBtu (One million British Thermal Units). This aims to attract investors to come to Indonesia.

“Investors are welcomed to build their factories here, because the gas price is economical, so it will have a multiplier effect,” Djoko added.

To date, the use of natural gas for Indonesia’s domestic needs has reached 68 percent of the country’s total natural gas production of 5,446.90 BBtud (billion British thermal units per day), and the remainder is for exports.

In 2022, the total value of Indonesia’s LNG (liquefied natural gas) exports was recorded at 6.6 billion U.S. dollars, up from 4.6 billion U.S. dollars in 2021. Meanwhile, the value of gas exports via pipelines in 2022 was 3.13 billion U.S. dollars, or an increase compared to that in 2021 worth 2.84 billion U.S. dollars.

*1 US dollar = 15,840 rupiah

Reporting by Indonesia Window