Publications

Indonesia has shifted from oil exporter to oil importer since the mid 2000’s. In order to meet the growing domestic energy demand, and to lessen the dependence on imported oil, a key focus for the country will be tapping its significant undeveloped gas resources. Indonesia’s remaining gas resources are still the highest in South East Asia, far exceeding Malaysia and Vietnam. A number of new gas developments are planned in Indonesia, but various issues have slowed down some of these projects. This paper reviews the emerging gas resources of Indonesia, discusses the current challenges and looks at success stories that could be replicated in the future. Indonesia has a good track record of expediting gas developments, including the giant Arun and Badak fields. Likewise, there are useful lessons in optimizing gas usage that can be learned from neighbouring countries. A key to improving the development and utilization of emerging gas resources in Indonesia is the domestic demand. The domestic market for natural gas picked up since the early 2000’s and the demand is expected to continue growing in the next decade. The government has taken steps to increase domestic allocation from future gas projects, which could prove beneficial particularly for the development of smaller fields in high demand areas. The lack of a centralized gas grid master plan, leading to scattered infrastructure, is one of the main challenges preventing the full utilization of gas domestically. However, the government’s policies on domestic allocation are expected to drive initiatives to expand the existing distribution and transmission network.