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As oil production declines, natural gas will play an increasingly important role in meeting future energy needs. Historically, South Sumatra has been considered as a “surplus” area, exporting gas to West Java, Central Sumatra and Singapore. However, with growing local demand, particularly from the power sector (PLN), more gas is needed in South Sumatra, particularly as CBM commercialization and Coal Power Plants have not progressed as expected. Currently, PLN gas demand in South Sumatera is primarily met by Pertamina and Medco, who deliver a combined 70 MMSCFD to PLN Power Plants in Kramasan, Indralaya and Borang to generate around 300 MW. It is understood that PLN requires more gas to backfill the current gas contracts. There may be some gas available nearby but PLN will have to compete with other demand centers. In its LMT PSC in South Sumatra, Medco sells gas to PLN in West Java via the scheme in Figure 1. Realizing there will be unmet local demand in the medium-term, Medco and PLN have reviewed the idea of rerouting the allocated gas to PLN generation facilities in South Sumatra via the scheme in Figure 2. Both parties benefit. PLN secures a gas supply within a competitive market, and Medco increases its gas netback price through reduced gas transportation costs. To realize this initiative, a number of commercial arrangement need to be put in place, including the transportation agreement, as well as a technical and operational review and anticipated modifications as the gas will flow through different pipeline segments that are likely to have different specifications. By close coordination and cooperation, SKK MIGAS, PLN and Medco expect that the gas will be able to supply South Sumatra and meet the objectives of all parties.