Domestic Gas Consumption Reaches 68.66 Percent by July 2022, Dominated by the Industrial Sector

The Ministry of Energy and Mineral Resources (ESDM) reported that domestic gas absorption until July 2022 reached 3,716 BBTUD or 68.66%. This figure continues to increase from previous years.

“Our gas production is mostly used for domestic needs, which is 68.66%. This reverses the conditions of several years ago where most of it was for export. Now, 2/3 of gas production is for national use,” said Director General of Oil and Gas Tutuka Ariadji in Jakarta on Monday (10/10) in his official statement.

This domestic gas consumption is dominated by the industrial sector at 29.2%, fertilizer at 13.49%, electricity at 11.62%, domestic LNG at 8.47%, lifting at 3.48%, domestic LPG at 1.51%, city gas at 0.19%, and BBG at 0.08%. Meanwhile, gas exports reached 1,697 BBTUD or 31.34%, consisting of LNG exports at 19.58% and pipeline gas exports at 11.77%.

“Gas utilization for industry is almost 30%. We continue to encourage our industries to grow further,” added Tutuka.

This increase in domestic gas utilization is to support domestic industries to become more competitive. In this regard, the Government has issued Presidential Regulation Number 121 of 2020 concerning the Determination of Natural Gas Prices. Based on these regulations, seven sectors receive a specific natural gas price of US$6 per MMBTU, namely the fertilizer, petrochemical, oleochemical, steel, ceramic, glass, and rubber glove industries.

Indonesia's gas potential remains promising, with proven reserves of approximately 41.62 TCF. Although its reserves are not significant compared to global reserves, Indonesia still has 68 potential unexplored basins offered to investors. Based on the Indonesian Gas Balance 2022-2030, Indonesia will be able to meet domestic needs from existing oil and gas fields. In the next 10 years, Indonesia is also expected to have a gas surplus of up to 1715 MMSCFD from several potential projects.

Currently, there are four oil and gas projects included in the National Strategic Projects (PSN): the Indonesia Deepwater Development (IDD) Project, Abadi Masela, Jambaran Tiung Biru (JTB), and Tangguh Train 3. The government hopes that gas production will not only come from these PSN projects but also from other fields such as Andaman.

(read: Indonesian Gas Production Decreases Faster Than Consumption in the Last Decade)